It's common knowledge that you need to keep your credit card safe from fraud, but how does it work? How do hackers get your card details in the first place?

Let's explore how scammers do credit card fraud and how you can stay safe.

How Hackers Get Your Credit Card Number

For a scammer to commit credit card fraud, they first need all the necessary details. There are several ways they can get these details, and they range from the very basic to the more technically complex.

Getting Details via Phishing

Phishing is an old strategy that is still effective today. The scammer gets in touch with you via phone or email, usually posing as your credit card issuer. From here, they can talk you into giving them your credit card information.

It sounds like something you'd be able to spot right away, but some phishers are very skilled and leverage different types of phishing. This is very similar to the tactic that was used in the British phone-hacking scandal a few years ago. Thankfully, you can learn how to spot phishing scams: be sure you study up so you don't become a victim!

Gleaning Details From Database Leaks

Scammers also get credit card details from online data breaches. Hackers have successfully breached big names like Target, Home Depot, and the PlayStation Network in the past. These companies tend to have saved payment information listed under each customer, which scammers can use for fraud.

The numbers stolen from those sites often end up in "carding" shops, where people go to buy stolen credit card numbers for use online. ZDNet explains that some accounts sell for as little as $5 on the dark web. This makes it easy for thieves to buy hundreds of cards at a time, potentially including yours.

Monitoring Your Input With Keyloggers

If a hacker manages to get a keylogger or another type of malware installed on your computer, they could quickly steal your credit card information when you use it for online shopping. The silent nature of keyloggers makes them particularly nasty, so be sure to protect yourself against keyloggers as much as possible.

Forging Payments Using NFC Skimming

Someone paying for goods using the NFC on a credit card.
Image Credit: AllaSerebrina/DepositPhotos

These days, credit cards have NFC scanning built-in. NFC is also known as "contactless," and it's when you place the card up against the payment terminal to buy something.

Scammers can use devices that act like these payment terminals. When they pass close to someone with a credit card in their pocket, the skimmer makes a fraudulent payment to the card. The victim may not even realize this has happened until they notice odd fees on their statement.

How Scammers Use Your Credit Card

Once a thief has your credit card, the hardest part is complete. Now all they need to do is use it or sell it online. The credit fraud they choose depends on their ulterior motive behind why they stole the details in the first place.

Making Contactless Payments

Contactless payments with cards don't require PINs or signatures, so they're perfect for credit card thieves. Payment limits used to be tiny but were increased for many during the Covid-19 lockdowns. Online payments don't require PINs or signatures either, so going on an Amazon shopping spree with a stolen card is remarkably easy.

Fortunately, there are constraints for the scammer. The upper limit of a credit card will stop them from spending too much, but these increased substantially. On top of this, credit cards typically allow a set amount of contactless payments before it asks for a PIN. Increasingly, for more robust security, some credit cards also have a mandatory One-Time Password (OTP) sent to your mobile number or email in order to make an online payment.

These restrictions mean the scammer can either perform only a small shopping spree before they're locked out without a PIN or are unable to make online payments in the case of credit cards with mandatory OTP.

Selling the Card Online

If the hacker doesn't want to "dirty their hands" with a stolen credit card, they sell the details online. These credit card markets thrive on the dark web, where all kinds of identifying information are up for sale. Sellers need to keep their practices under wraps to protect their business from law enforcement, and the dark web gives them the protection they need to operate.

Buying and Flipping Goods

browsing for gifts on amazon

If the hacker has enough information to make large purchases with the cards, they can buy goods and sell them on the black market. This is safer for them, as it hides their tracks better than if they transferred money directly into their bank account.

Scammers will typically buy gift cards. They can then sell these cards on the black market for less than face value. For instance, a $100 gift card will sell for $60. This makes them highly desirable for buyers and gives the scammer a way to wash their hands of the evidence. They might even use it to buy a fake degree as part of degree fraud.

How to Protect Yourself From Credit Card Fraud

There's a lot a scammer can do with a credit card. As such, it's important to keep yours secure. By following a few guidelines, you can decrease the chances you'll encounter credit card fraud.

Don't Share Credit Card Information Freely

First, don't share your card information over the phone or in an email. Credit card companies, banks, and stores won't randomly ask for your credit card information. If someone asks for them out of the blue, exercise extreme caution. If you need to share your information over the phone, be sure that no one is around to overhear you.

Keep Track of Data Breaches

Second, pay attention to online security news. If a service you use suffers a database breach and leaks payment information, contact your bank immediately.

You could wait to see if you get any suspicious charges on your account before alerting your bank, but this is risky. For example, ABC News reported in 2018 on how the Bank of America fraud department can be hard to convince that a scam occurred in the first place. Waiting for fraud to happen may result in lost money that you have to wrestle back.

Protect Your Card's RFID

Brown wallet with credit cards inside

Consider buying a smart wallet with RFID blocking, 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.

Double-Check Payment Points

Be careful with where you insert your credit card. Scammers can operate at ATMs, pay-at-the-pump gas stations, small stores, and restaurants. If the payment terminal looks weird somehow, 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.

Keep Tabs on Your Records

Finally, make sure you monitor your credit card statements, bank statements, and credit reports. The earlier you catch a potentially fraudulent transaction, the better. These days, you can get a credit report for free without harming your score. This makes it easier to spot any weird purchases and quickly report them.

Staying Safe With Payment Cards

Credit cards are a hot commodity for scammers. From small NFC skims to large-scale gift card selling, there are multiple ways they can make use of your details. Keep them safe to avoid headaches in the future!