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11 Tips for Preventing Credit Card Fraud This Season

The holidays represent the busiest shopping season of the year, and a prime time for thieves to get in on a piece of the action.

"Credit card fraud can affect anyone, at anytime, but consumers are particularly vulnerable around the holidays," says Jack McCoy, vice president of security for Discover Financial Services.

credit cards

A record 50 percent of shoppers are expected to do some online shopping this holiday season, according to Consumer Reports.

And while credit card fraud was once more limited to those who had lost wallets or stolen purses, today the Internet opens up a plethora of new credit fraud avenues.

This year, Consumer Reports expects that a record number of shoppers (50 percent) will shop online for at least one holiday purchase, and online shopping is expected to jump 18 percent from last year, to a total of $32 billion, according to JupiterResearch.

The good news is that whether you plan to shop online or in the stores, all it takes is a little know-how to protect yourself from fraud.

" ... There are a number of tips that smart shoppers can adopt to reduce the likelihood of falling victim to scammers, hackers and credit card thieves," says McCoy.

Prevent Credit Fraud with These 12 Tips

  1. Keep an eye on your statements. During the holidays, credit card companies actually shut down many of their flagging systems that watch for suspicious transactions.

    "There are still some triggers the software will catch, but the companies cut it way back -- otherwise the system would crash, because there are so many transactions during the holidays," says Todd Davis, an ID-theft prevention expert and chief executive officer of Arizona-based LifeLock Inc.

    This means that you need to be extra vigilant in watching your own statements for suspicious activity. This is easy to do online, as most credit card companies post new purchases within a day, and you can check the statement as many times as you like.

  2. Keep up with your credit report. If you've never checked your credit report, or haven't done so in a year or more, the holidays are an ideal time to do so. Regularly monitoring your report allows you to check for any unauthorized accounts and fraudulent activity.

    You are entitled by law to one free copy of your credit report each year from each of the major credit reporting bureaus, and it can be ordered from

  3. Opt for Paperless Statements. With paperless statements, you don't have to worry about someone stealing your private information right out of your garbage can or mailbox because your statements are e-mailed to you online. (If you do get paper statements, buy a paper shredder, at the very least.)

    credit cards

    Always keep your credit card number shielded from those around you while shopping.

  4. Get a Virtual Credit Card. Many credit card companies offer virtual credit cards for shopping online. The card has a unique number that can only be used once, allowing you to shop online without ever having to enter your real credit card number. Check your credit card's online website for information.

  5. Protect Your Card Identification Number (CID). The CID code is a three- or four-digit security code that's placed on the front or back of your credit card. Most online, phone, or mail-order purchases require you to give this code before the transaction goes through, so make sure to keep it confidential.

  6. Be a Savvy Online Shopper. This means avoiding using the same username and password for everything (if it falls into the wrong hands, a thief would have access to everything), and not letting retail sites remember your credit card number for future purchases. Though it's convenient, it's also possible that your credit card number could be stolen by hackers.

  7. Keep Your Credit Cards Separate From Your Wallet. This way, if your wallet is stolen, your credit cards will be safe.

    If you don't know the retailer you're buying from online, check them out with the Better Business Bureau first.

  8. Protect Your Credit Card in Stores. Keep an eye on your card, watch who handles it, and shield the number from those around you as much as possible. If you have multiple cards on your account (such as cards for your children) make sure that they also know to keep the card in a safe place.

  9. Sign Your Credit Card as Soon as You Get It. Though it sounds obvious, many people carry around unsigned cards that leave them vulnerable to credit card fraud.

  10. Keep Track of Receipts. Although many companies now block out all but the last four digits of credit card numbers on receipts, there are exceptions. If you are throwing away a receipt, check to see if your credit card number is on it, and if it is, shred it first.

  11. When Shopping Online Make Sure It Is in a Private Place. It is highly recommended that you only shop online from a computer you know and trust. Using a computer in a library or Internet café leaves you much more vulnerable to credit card thieves. On your personal computer, make sure you have installed up-to-date anti-virus, anti-spyware, anti-spamware and firewall software.

Recommended Reading

Online, Phone, U.S. Mail or In-Person: Where is Your Credit Card and Personal Identify Safest?

10 Secret Strategies to Improve Your Credit Score

Sources November 16, 2006 November 13, 2006 November 12, 2006

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