Credit cards may have simplified the way people shop, but what credit cards have also done is open up new avenues for identity theft. Before credit cards, identity theft was limited to fake checks and trying to run delinquent bank accounts under someone elseâ€™s name. However all that has changed with credit cards. Identity thieves are constantly looking for newer ways to steal a personâ€™s identity using his credit card details. If you are a credit card holder then it is essential for you to understand how credit card details are used for identity theft and how you can protect yourself from being a victim of identity theft.
The first thing you need to understand is that credit card fraud and identity theft are closely interlinked. A person that uses your credit card details for financial gain without your authorization is called an identity thief. A classic example of credit card fraud is using a lost/stolen credit card to make purchases. The first thing to do in case of loss or theft of a credit card is to report it to the credit card company so that no one can use the card to make purchases. Also remember the maximum liability for a stolen or lost credit card is $50 as per US law.
Apart from the oldest means of identity fraud, today credit card statements, credit card numbers and other documents that contain credit card details are used to affect identity theft and commit credit card fraud.Â In fact one of the simplest ways for an identity thief to get hold of your credit card details is to simply look through your mail and get a hold of your credit card statement. If you stop receiving your credit card statements, the first thing you need to do is notify your credit card company and make sure that the absence of credit card statements is not an error on their behalf. Also if you are planning on shifting residences make sure the credit card company is informed well in advance.
Similarly, if you are want to dispose off your old credit card statements and receipts, do not throw them away. Make sure you either burn old credit card statements or the best option is to invest in a shredder and shred all the credit card related documents you want to dispose off. Identity thieves actually look through old garbage cans to look for financial documents so they can use the details to carry out credit card fraud.Â Also make sure that you carefully scrutinize every single credit card statement carefully, if you detect discrepancies in the statement make sure you find the cause. If there is more than one discrepancy the chances are that you are a victim of credit card fraud and identity theft.
When you do use your credit card, never let it out of your sight. Although it might sound paranoid but the truth is that all it takes to commit credit card fraud is to write down the details of your credit card and anyone can use the details to shop online. For example when you use your credit card in a restaurant the credit card is actually taken away by the waiter to process it at the counter. All the waiter has to do is write down your credit card details and return the card to you; he can use the details to shop online at his leisure. As a result most credit card fraud experts suggest paying by cash in places where the card is taken away from you for processing.
Another precaution you can take is getting a credit card with your photo on it. No one bothers verifying the signatures on a card against those on a receipt anymore. With a photo credit card the chances are that the shop keeper will notice an unauthorized person trying to use your card and will most likely check the signatures on the card against those on the receipt. Remember sometimes it helps being paranoid, and when it comes to your credit card make sure you remember the basic rules for protecting your identity and you donâ€™t becoming a victim of credit card fraud. All it takes is a little common sense mixed with awareness of how credit card fraud happens.