Tips for Avoiding Credit Card Fraud

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Whenever the economy suffers a downturn crime statistics tend to trend upward, because more people turn to illegal activities in order to make money. So it is no wonder that credit card related crimes are becoming more common, more sophisticated, and more high-tech. But as the prevalence of credit card fraud increases, banks and law enforcement agencies are also revving up their efforts to fight back on behalf of consumers.

The Federal Trade Commission, for example, brought down an international crime ring some time ago that had stolen about $10 million through a long and elaborate credit card scheme. The thieves had gone to great pains to create many fictitious companies that would then charge very a small amount to tens of thousands of credit card accounts. Because the amounts were always relatively small, with none of them exceeding $10, most cardholders did not notice them and the scam was able to victimize more than a million cardholders over a period of four years.

Monitor Transactions

The conspiracy would have continued except for the fact that some alert consumers noticed the unwarranted charges and notified the authorities. That helps to underscore the importance of being vigilant regarding your credit cards and monthly statements, which is one tip that both banks and law enforcement personnel recommend for safeguarding your accounts. They say that if you get a charge you do not recognize you should phone the company that charged you to find out what it was that you bought. If you get no answer - or just a recorded message on an answering machine - notify your card company and dispute the charges immediately.

It is also important that you?keep track of your purchases, either by saving the receipts to match them against your end-of-month statement or by using your credit card company's online account management options. If you manage your account online using a secure browser and password then all of the monthly payment activity in your account will be archived there so you can review it as needed.

Recognize Spam

Another popular way to target consumers is via email, so security experts warn that you should never respond directly to emailed requests for you to register on the website of one of your credit card issuing companies. You could wind up on a fake site that is just phishing for your passwords. Then they can use those to attack your other accounts. A better way to respond to this kind of pitch is to use your computer browser - not the link sent in the email - to navigate your way to the website of your credit card company or bank. From there you can go to your account to see if there are any messages or requests for you. If not you can call or email the bank to ask them if they sent you the suspicious notification.

Set Credit Card Preferences

Most credit card companies also offer you the online option to set up account preferences that include convenient email notifications if you start to approach or exceed your credit limit. Set your credit card preferences and then if someone steals your credit card information and makes a large purchase you will immediately get an email notification. Sometimes it may also alert you to your own large purchases, but that will only help you remain aware of your budget and expenses.

Another way to manage preferences if you have a high credit limit and are afraid a thief might try to exploit it is to set your online credit limit alerts low. If you have a limit of $2,000 for example, you can set your alerts to email you whenever you accumulate an outstanding balance of $500 or more. Whenever you get a notification then go to the credit card account and pay off enough of your balance to drop it back down below the $500 threshold. That will not only keep you alert regarding any fraudulent purchases that exceed your notification limit of $500 but it will also make you more mindful of your own credit card use - and it will force you to pay the bill off early which helps to avoid paying high interest rates on balances carried forward.

Paying by Check

When paying your credit card by check, don't write the entire credit card account number on your checks?either, even if the credit card company advises you to do so; just write the last four digits. That gives the bank enough information to know it's your account but it doesn't give a thief enough to steal your identity.

Last but not least, shred all your financial statements after you read them and pay your bills. Many people who are victims of credit card fraud get targeted by criminals who just rummage through their trash at the curb. As they say, one man's trash is another man's gold. So invest in a shredding machine so that you can destroy any evidence that might lead someone to invade your credit card account.

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