Credit card fraud continues to be a huge problem, despite the introduction of chip enabled credit cards in the US.
Twice during the past year I have had to replace credit cards, as the accounts/cards were fraudulently used. One of my sisters had one of her credit cards fraudulently used in the past two weeks.
Until chip technology acceptance at retailers and stores becomes much more commonplace, credit card fraud will continue. There is not much we can do to prevent this type of fraud as we shop at stores and eat out at restaurants, especially ones that do not yet accept chip-card technology.
One of the major hassles of having your credit card hacked is dealing with recurring payments that you have set up with that credit card. After a credit card hack, you have to log into each of the company websites that you have established for recurring payments, to give them the new credit card number, as well as the new expiration date and sometimes the security code.
Our recommendation: You should have a separate credit card just for recurring charges, such as utilities, subscriptions, iTunes, internet, cable, cell phone providers and more.
The purpose of this strategy is that for the credit card that you use for recurring payments, you should NEVER take or use that card outside of your home. Do not use it at a gas station, a retail store or restaurant. To re-use an old advertisement….don’t leave home with it.
This will be your “recurring payment only” credit card.
Doing this is the best way that you can prevent this credit card from being hacked, as most credit card fraud happens from the retail use of credit cards, not from establishing recurring payments through the card from credible companies.
This may be a major change in how you use your credit cards, but it will save you lots of time if another of your credit cards is fraudulently used and you need to get a new card account established. Hopefully, by adopting this strategy, getting a new card will just affect you for a few days, until you get a replacement card. It should prevent you from having to change all your recurring payment information.
Other credit card related recommendations and thoughts:
- Use chip-enabled credit cards wherever possible. If your credit cards do not yet have chips, contact your card company and tell them you want one.
- Thank smaller retailers and establishments that have obtained chip-enabled credit card readers, as they are expensive.
- You should review your credit card activity online regularly. I suggest at least weekly.
- At a minimum, carefully review your credit card statements at the end of every billing period to make sure all the charges are legitimate.
- You should consider setting credit card alerts, so you will receive a text message or email if charges exceed a certain amount. The problem with this recommendation is that most fraudulent activity starts with minimal charges, or around $100 or $200. Thus, getting frequent email alerts on your regularly used credit cards maybe very cumbersome. This will not prevent fraudulent activity, but help you identify it quicker.
- The most common places that fraudulent charges are made, if your account is ‘hacked” are places like Home Depot, Best Buy, Lowes and in the Midwet, Meijer’s. This does not mean you should not shop at these locations. These are the places that people who do the fraudulent activity go first, when they start to shop with stolen credit card numbers. These are the charges you should look for in your card activity.
- You should provide to each of your credit card companies your email address and cell phone number, so they can contact you if they identify what appears to be unusual activity. Again, this will not prevent fraud, but may stop it faster.
Link of the week: To learn much more about the benefits of using credit cards to obtain the most reward dollars, points and other perks, as well as airline and hotel loyalty programs and their credit cards, I recommend reading or following “The Points Guy” at www.thepointsguy.com or @thepointsguy on Twitter. The benefits can be worth thousands of dollars per year, if done strategically.
Thanks to my family members, who provided some of the above suggestions.