Avoiding Credit and Charge Card Fraud

A thief goes through trash to find discarded receipts or carbons, and then uses your account numbers illegally.

A dishonest clerk makes an extra imprint from your credit or charge card and uses it to make personal charges.

You respond to a mailing asking you to call a long distance number for a free trip or bargain-priced travel package. You're told you must join a travel club first and you're asked for your account number so you can be billed. The catch! Charges you didn't make are added to your bill, and you never get your trip.

Credit and charge card fraud costs cardholders and issuers hundreds of millions of dollars each year. While theft is the most obvious form of fraud, it can occur in other ways. For example, someone may use your card number without your knowledge.

It's not always possible to prevent credit or charge card fraud from happening. But there are a few steps you can take to make it more difficult for a crook to capture your card or card numbers and minimize the possibility.
Guarding Against Fraud

Here are some tips to help protect yourself from credit and charge card fraud. 

Do:

• Sign your cards as soon as they arrive. 
  
• Carry your cards separately from your wallet, in a zippered compartment, a business card holder, or another small pouch. 
• Keep a record of your account numbers, their expiration dates, and the phone number and address of each company in a secure place. 
• Keep an eye on your card during the transaction, and get it back as quickly as possible. 
  Void incorrect receipts. 
• Destroy carbons. 
• Save receipts to compare with billing statements. 
• Open bills promptly and reconcile accounts monthly, just as you would your checking account. 
• Report any questionable charges promptly and in writing to the card issuer. 
• Notify card companies in advance of a change in address. 
  
  Don't:
• Lend your card(s) to anyone. 
• Leave cards or receipts lying around. 
• Sign a blank receipt. When you sign a receipt, draw a line through any blank spaces above the total. 
• Write your account number on a postcard or the outside of an envelope. 
• Give out your account number over the phone unless you're making the call to a company you know is reputable. If you have questions about a company, check it out with your local consumer protection office or Better Business Bureau.
  
  

Types of credit cards

When you look back at the history of credit cards, they started out simple and standard: Each issuer produced one card with one set of features. Today, credit cards come in multiple levels with ranging interest rates, fees and reward programs, so before you fill out an application, it's important to know which will best suit your financial situation and lifestyle. 

The following is a brief description of the most common types of credit cards available. 

Standard credit cards : 

• Balance transfer credit cards 
  
• Low interest credit cards 
  
  

Credit cards with rewards programs :

• Cash back credit cards
• General reward points credit cards
  
• Hotel/travel points credit cards
  
• Retail reward credit cards
  
• Gasoline points / rebates credit cards
  
• Automobile manufacturer reward credit cards 
  
• Home improvement rewards credit cards 
  
  

Airline miles / frequent flier credit cards :

• Airline-specific credit cards
  
• Generic airline miles cards 
  
• Credit cards for bad credit
  
• Secured credit cards
  
• Prepaid debit cards 
  

Specialty credit cards 

• Business credit cards
• Student credit cards

What is a creditcard?

A credit card is part of a system of payments named after the small plastic card issued to users of the system. The issuer of the card grants a line of credit to the consumer (or the user) from which the user can borrow money for payment to a merchant or as a cash advance to the user. A credit card is different from a charge card, which requires the balance to be paid in full each month. In contrast, credit cards allow the consumers to 'revolve' their balance, at the cost of having interest charged. Most credit cards are issued by local banks or credit unions, and are the same shape and size, as specified by the ISO 7810 standard.