Prior to the 2016 Christmas holiday, I received a notification from my credit card company that they were tracking some suspicious card activity on my account. I immediately logged into my account and found over $500 in unauthorized charges. The charges were for everything from household decorations to shoes. I contacted the online fraud department and confirmed their suspicions. They immediately closed down the account and issued me a new card. Then credited back the unauthorized charges. I had just become a victim of online credit card fraud.
If credit card fraud is a concern for you, here are a couple of tips on how to minimize credit card fraud.
Don’t Use Your Check Card for Online Purchases
As online fraud becomes more and more prevalent it’s important you take whatever measures you can to be sure your accounts are safe. One of the practices I developed many years ago was that I never make online purchases with my bank card – checking or savings. My perspective is simple. I don’t want anyone other than me having access to my bank accounts.
In addition, when credit card fraud takes place, it could take days for your financial institution to investigate the fraudulent activity. During that time period, the money that was withdrawn from your account may not be available for use. Obviously, credit card fraud can take place with any credit or debit card, but why expose your checking or savings account any more than you have to.
As discussed in Filling The Pig – In 4 Steps, I recommend simplifying the number of credit cards you have down to one, for emergencies. However, you could also leverage this credit card to pay for any online purchases. A single credit card will not only allow you to diligently keep track of your online purchases, but it also keeps your checking and savings account safe.
- How Many Credit Cards Should You Have?
- Best Identity Theft Protection Services
- 2 Little White Lies We Tell Ourself to Justify Spending with Credit Cards
- 4 Tips to Pay Off Credit Card Debt Fast
- 10 Successful Money Management Tips to Live By – from a 52-Year-Old
- It’s About Focus: How to Pay Off Credit Card Debt Using the Snowball Method (video)
- What You Shouldn’t Do with Your Holiday Credit Card Debt, and How to Avoid a Repeat Next Year
Set Up an Alert on Your Credit Card
Some credit card companies will allow you to set up a transaction alert. A transaction alert is a dollar amount threshold you specify to receive an email or text notification when charges made to your card are greater than the threshold. For example, if you set a threshold of $10, then you will receive an email/text notification each time a charge is made greater than $10. The transaction threshold for my credit card was automatically set up for $500. This is why I never received notification for the individual fraud transactions which were less than $500. Transaction alerts are another way of minimizing the potential impact of credit card fraud. Check with your credit card company to see if they provide transaction alerts and if they do find out what the current threshold limit is.
I have no doubt that as more and more individuals purchase products online, credit card fraud will only continue to become more prevalent. Use these two tips to protect your checking account and minimize credit card fraud.
- Credit Sesame – Credit Monitoring and Management
- FTP Ebook Series
- Filling The Pig – Free Finance Tools