In 2007, the Australian Payments Clearing Association (APCA) reported that credit card fraud rate was 45 cents per $1000. The following year, the figure increased to 53 cents.
Fraudsters often steal the identities of credit card holders to use their cards illegally. As such, avoiding credit card fraud means taking measures to prevent identity theft when using credit cards. Here are useful tips to avoid becoming a credit card scam victim.
Keep Credit Card Within Sight at all Times
The most effective way for avoiding credit card fraud is to prevent card details from being copied. Make sure the card is within sight when paying in a shop, supermarket or restaurant. If the cashier swipes the card a second time by mistake, be sure to demand for a “transaction canceled” receipt for the first swipe. That’s because fraudsters are known to swipe the cards through a second machine – a process called card skimming – to steal details from card holders.
If dining at the restaurant, leave the table and pay in person at the cashier to ensure that no one is skimming the card. It may seem a bit odd to do that at restaurants, particularly classy restaurants, but it’s better to be safe than sorry!
Use Chip and PIN Cards
Another way to prevent identity theft is to change signature-based credit cards to chip and PIN cards, which were introduced in 2008 in Australia although the technology has been widely used for some time elsewhere. Chip and PIN cards provide added security because personal information used to be held in the magnetic strip on the back of cards is now embedded within the microchip. This makes card skimming harder.
Also, a chip and PIN card remains in the machine throughout the transaction, yet another process to prevent skimming. Instead of swiping the card, the merchant will insert the card into a slot in the machine the entire time. The user then enters his PIN and the transaction is done. However, be sure not to reveal the PIN to anyone at anytime.
Check Monthly Statements Carefully
Keep all credit card receipts and use them to check against the monthly statement carefully. If there are unauthorized transactions, contact the credit card company immediately. Don’t delay reading the statements as late reporting of suspect transactions can result in the credit card fraud victim not being refunded fully. Checking the account online regularly also helps in avoiding credit card fraud.
Destroy Expired Credit Cards
To prevent identity theft, make it a practice to destroy expired or unwanted credit cards. Fraudsters can still use the old information to clone cards. When cutting up a card, be sure to cut through the signature, magnetic strip and chip. A few cuts are certainly better than one.
Credit card fraud is costing users a lot of money. To avoid card fraud, identity security and protection is crucial. Keep the credit card within sight all the time, use chip and PIN cards instead of signature-based cards, check monthly statements carefully to detect unauthorized transactions and destroy all expired cards.
Found this article useful? Read also How to Choose Credit Cards, Practical Credit Card Management Tips and Beware of Credit Card Traps.
References:
Tait, Allison. Credit Card Stressbusters. Queensland: Wrightbooks, 2009.
Blue, Tim. The Seven Ages of Money. Australia: Choice Books, 2003.
The Australian Payments Clearing Association – Payments Fraud Statistics
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