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If you’re part of my generation, you might have had to convince your parents or grandparents at some point that using their credit card online is safe. “It doesn’t feel safe,” they say, but you tell them that’s the way everyone shops all the time, and their credit card information is totally safe.

But you’re wrong. Credit card numbers do get stolen, and credit card fraud does happen, both online and offline. But how does it happen? How does a thief get your card number? Why don’t verification systems prevent these problems? And what can you do to keep your own cards safe? Let’s take a look at credit card fraud and find out how you can protect yourself.

Getting Your Card Number

Obviously, the first thing that needs to happen for credit card fraud to take place is someone else getting your credit card number Fraudsters Still Clone Credit Cards: Keep Plastic In Your Pocket Fraudsters Still Clone Credit Cards: Keep Plastic In Your Pocket If you regularly pay by credit or debit/cheque card (and who doesn’t these days?) you should be aware that your card can be cloned. But how is this done, and what types of business are... Read More . There are a number of ways to accomplish this, and they range from the very basic, to the more technologically complex.

Phishing Gone Phishing: 5 Security Terms You Need to Know Gone Phishing: 5 Security Terms You Need to Know The Internet is a shark tank; you're exposed to threats left and right. You need to understand the risks to protect yourself. Here we introduce you to the five most common online security threats. Read More , for example, is an old strategy that only requires a thief to be a smooth talker. They’ll get in touch with you via phone, email, post, or some other way, usually posing as someone from your credit card issuer, and talk to you into giving them your credit card information. It sounds like something you’d be able to spot right away, but some phishers are really good at what they do—this is very similar to the tactic that was used in the British phone hacking scandal Not Just Email: Your Voice Mail Can Be Hacked, Too - Here's How To Secure It Not Just Email: Your Voice Mail Can Be Hacked, Too - Here's How To Secure It Read More a couple years ago.

phish-hook

Another way in which thieves could come to have your 16-digit credit card number is through online data breaches like those suffered by Target, Home Depot, the Playstation Network, and a whole list of others in recent years. The numbers stolen from those sites often end up on “carding” shops, where people go to buy stolen credit card numbers for use online. According to Brian Krebs, the card numbers sold on Rescator, one of the biggest card-buying sites, go for a median price of about $27 per card. This makes it easy for thieves to buy hundreds of cards at a time, potentially including yours.

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It’s not always a merchant or a bank that’s compromised, though; sometimes it’s your own computer. If a hacker manages to get a keylogger or another type of malware Viruses, Spyware, Malware, etc. Explained: Understanding Online Threats Viruses, Spyware, Malware, etc. Explained: Understanding Online Threats When you start to think about all the things that could go wrong when browsing the Internet, the web starts to look like a pretty scary place. Read More installed on your computer, they could easily nab your credit card information when you use it for online shopping. Because most people don’t do enough to protect their computers from malware, this is a serious threat.

Your card itself can also be the target for card thieves. With the increase in contactless payment credit cards, radio frequency identification (RFID) scanners have become a more popular method to steal credit card information; all a thief needs to do is get a scanning device in close range RFID Can Be Hacked: Here's How, & What You Can Do To Stay Safe RFID Can Be Hacked: Here's How, & What You Can Do To Stay Safe How much do you know about RFID chips? Do you know how many you're carrying at any given moment? Do you know what information is stored on them? Do you know how close a hacker... Read More to your card, and they’ll have all the information they need.

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This same strategy can be used if your phone uses near-field communication (NFC) NFC! What Is It Good For? Here Are 5 Uses NFC! What Is It Good For? Here Are 5 Uses If your phone doesn’t already have a Near-Field Communication chip in it, your next one probably will. High-end Android handsets are quickly adopting the tech and while Apple has so far shrugged it off, adoption... Read More to communicate with points of sale to share your credit card information—Apple Pay, Google Wallet, Visa PayWave, and similar apps Everything You Need to Know about Apple Pay, Samsung Pay, and Android Pay Everything You Need to Know about Apple Pay, Samsung Pay, and Android Pay Android Pay, Samsung Pay, Apple Pay all have their advantages and disadvantages. Let's take a look at exactly how each of them works and who can use them. Read More use this technology when you pay with them. If an NFC reader is compromised or tampered with, it could be giving your credit card information to a criminal.

A similar method called “skimming” requires a thief to have a physical scanner that reads the information from your credit card Fraudsters Still Clone Credit Cards: Keep Plastic In Your Pocket Fraudsters Still Clone Credit Cards: Keep Plastic In Your Pocket If you regularly pay by credit or debit/cheque card (and who doesn’t these days?) you should be aware that your card can be cloned. But how is this done, and what types of business are... Read More . These devices are surprisingly easy to get (you can get a basic reader for $13 on Amazon), and thieves can be rather creative in using them to tamper with ATMs How Scammers Can Use ATMs To Clean You Out How Scammers Can Use ATMs To Clean You Out That ATM in the wall of your local bank might look like an easy way to get some cash, but you need to make sure that the scammers didn't get there first. Read More , card readers at businesses, and other places where your card is swiped on a regular basis. ATM fraud is surprisingly common; check out Dan Price’s awesome article on ATM fraud These 7 News Reports Prove ATM Fraud Can Hit At Any Time These 7 News Reports Prove ATM Fraud Can Hit At Any Time We often go into auto-pilot while using ATMs, but in Europe alone, cash point fraud increased by 15% in the first six months of 2015. These news stories prove ATM fraud can strike at any... Read More to see just how much of it happens every day.

And, of course, there’s the most time-tested, old-fashioned way: just stealing the card. A forgotten wallet or purse, a dropped card, an unlocked car door, or any number of things, can make your card easy for a thief to grab. Sometimes they’ll just write down your information—the number of waiters caught writing down card numbers while running customers’ cards is larger than you might expect.

Using Your Credit Card

Of course, once a thief has your credit card, the hardest part is done. Now all they need to do is use it (or sell it). Banks want you to think that your credit card transactions are very secure, but a quick trip to the store makes it clear that anyone with your card could use it wherever they want. I live in the US, where not all cards have EMV chips Heads Up, Americans: Here's How Credit Cards Are Changing in 2015 Heads Up, Americans: Here's How Credit Cards Are Changing in 2015 Chip credit cards have been standard for years in the world outside of the USA. Now they're coming to the US; here's everything you need to know. Read More yet, and I haven’t had my signature checked against my card or driver’s license in a long time.

Contactless payments with cards don’t require PINs or signatures, so they’re perfect for credit card thieves (even though the limits for contactless payments are rather small, they add up quickly). Online payments don’t require PINs or signatures ether, so going on an Amazon shopping spree with a stolen card is remarkably easy.

online-shopping-credit-card

And, as I mentioned, these card numbers can be sold online. Rescator is one of many sites that sell this information—most of these sites are on the dark web, where all sorts of identifying information can be bought Here's How Much Your Identity Could Be Worth on the Dark Web Here's How Much Your Identity Could Be Worth on the Dark Web It's uncomfortable to think of yourself as a commodity, but all of your personal details, from name and address to bank account details, are worth something to online criminals. How much are you worth? Read More , but some are easy to get to from any browser. By staying hidden, using servers based in other countries, and making it difficult for law enforcement to look for patterns in stolen cards, these sites stay untouchable.

How to Protect Yourself from Credit Card Fraud

As you can see from the list above, there are a lot of different ways that fraudsters can obtain and use your credit card information—it might seem like it’s impossible to protect yourself. But by following a few simple guidelines, you can significantly decrease the chances that you’ll fall victim to credit card fraud.

First, don’t share your card information over the phone or in an email. Most credit card companies, banks, and stores won’t ask for your credit card information via email, so an email asking for this information should be a clear sign that you’re being scammed 5 Examples To Help You Spot A Fraud Or Fake Email 5 Examples To Help You Spot A Fraud Or Fake Email The shift from spam to phishing attacks is noticeable, and is on the rise. If there's a single mantra to keep in mind, it's this -- the number one defense against phishing is awareness. Read More . If you need to share your information over the phone, be sure that no one is around to overhear you.

eavesdropping

Second, pay attention to online security news; if a retailer or a bank that might have your credit card information gets hacked, call your bank, tell them what happened, and ask for a new card. You could wait to see if you get any suspicious charges on your account before alerting your bank, but it’s up to you whether or not you want to take that chance before starting the process.

Third, if your card is RFID-equipped, consider getting an RFID-blocking wallet What Are RFID-Blocking Wallets & Which Should You Buy? What Are RFID-Blocking Wallets & Which Should You Buy? If you knew that someone could read your credit cards, passport, and even driver's license without actually having to swipe them, would you take steps to guard against it? Read More so your card is protected while it’s in your pocket. By blocking RFID signals, the wallet prevents any device from reading the information on your card until you take it out to use it.

Fourth, be on the lookout for any card-scanning device that looks like it’s been tampered with. ATMs, pay-at-the-pump gas stations, small stores and restaurants, and many other places can be targeted by skimmers. If something looks suspicious, use another method to pay. Make cash withdrawals from within your bank, pay at the counter when you buy gas, and don’t let your card out of your sight.

swiping-card-restaurant

Finally, make sure to monitor your credit card statements, bank statements, and credit reports on a regular basis. The earlier you catch a potentially fraudulent transaction What To Do If You’re A Victim Of Online Credit Card Fraud What To Do If You’re A Victim Of Online Credit Card Fraud Read More , the better the chances that you’ll be able to prevent further trouble. You can get a credit report free every year from annualcreditreport.com, but you should make sure to check your online accounts much more frequently than that to see if anything suspicious is going on.

Your Credit Card Fraud Stories

Now that you know how credit card fraud happens and what you can do to protect yourself, we want to hear your stories of credit card fraud. Have you ever had a card stolen? Do you know how the thief got the information? What tipped you off to the fact that your card had been compromised? And what did you do about it? Share your stories below so we can all learn from them!

Image credits: steal a credit card by Andrea Danti via Shutterstock, wk1003mike via Shutterstock.com, LDprod via Shutterstock.com, A. and I. Kruk via Shutterstock.com, India Picture via Shutterstock.com, Khakimullin Aleksandr via Shutterstock.com.

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