- Credit card fraud was up 35% year over year in April, according to Fidelity National Information Services — and with the holidays approaching, you'll want to be extra vigilant.
- If you're making large purchases with a debit card, consider switching to a credit card to get zero-liability protection if someone steals your account info.
- You should also check your account activity each day and set up spending alerts so you're notified as soon as something looks amiss.
- Check to see if your credit card offers a virtual number, which you can change each time you make a purchase to protect your account.
- See Business Insider's guide to the best credit cards »
Due to the coronavirus, many of us have shifted nearly all of our credit card spending online in 2020. And it's been easy; there's no need to go to the store, no need to insert or wave your card and no need to worry about virus transmission when you're behind your screen.
However, you should still be very concerned about the safety of your financial information. Fraudsters and criminals know that more transactions are happening digitally, and they're working hard to profit off this big change.
Earlier this year, data from Fidelity National Information Services showed that the amount of fraudulent credit transactions had increased by 35% in a year-over-year comparison. That was in April, too, when many people were trying not to spend any of their cash.
As the holidays approach, you're likely already looking for gifts and deals online, and it seems likely that plenty of online criminals are looking for your credit card number. Here are a few simple tips to follow to make sure that you're taking the proper precautions to give those thieves nothing more than a cyber bag of coal.
1. Use your credit card — not your debit card
The Fair Credit Billing Act (passed in 1974) stipulates that the maximum amount you could owe for unauthorized use of your credit is $50. In most cases, you would owe nothing — that's where the "zero liability protection" on many credit cards really matters.
Debit cards, though, are a different story. Those pieces of plastic are governed by the Electronic Fund Transfer Act, which says you could be responsible for up to $500 of fraudulent charges if you fail to report it for more than two business days.
And even if your bank doesn't make you pay for those fraudulent charges, you're still going to have to jump through hoops to get your money back. Keep that cash in your checking account, and stick with your credit card. It has better protection and better opportunities to reward your spending, too.
2. Check your account activity each day
While you aren't liable for fraudulent credit card use, you still don't want it to happen. It can create all kinds of headaches with your credit report, not to mention you'll have to cancel automatic payments if you have to change your card number due to fraud. So don't wait until you review your monthly statement to make sure your card is safe.
Make a point to check your banking app once a day. A daily check-in on your credit card transactions can give you a good understanding of how you're spending your money, and it will give you a heads-up if someone else is attempting to spend it.
3. Set up spending alerts
Check your online bank portal for options to pre-program alerts that can make you aware of new purchases.
Many banks offer to send alerts if a transaction exceeds a certain threshold, if an international charge has been made to the card, or if an online or phone charge is pending. Have those notifications emailed or texted to you — whichever you prefer — and you'll be able to dispute anything that seems out of the ordinary immediately.
4. Be suspicious
"Don't click on strange links" may seem like common sense, but online criminals are getting more sophisticated than the old-school misspelled messages pleading to send money to someone who desperately needs your help.
Rather than clicking on links from my email inbox, I tend to visit the site — look for the lock sign or the https, with the "s" meaning "secure"— directly. The same goes with your text messages.
And while it's tempting to hand over your email address or other information to any retailer in exchange for a promo code, I tend to limit my number of sign-ups simply because those retailers are major targets. Look no further than the Barnes and Noble data breach I just received an email about for evidence that when your information is stored in a retailer's system, it's another potential risk.
5. Ask your issuer about virtual account numbers
Some banks include the option to create virtual credit card numbers for your online transactions. Instead of using the regular 16-digit code on your card, this system generates temporary numbers for your purchases. So, even if a hacker stumbles on to the number, they aren't going to be able to do much with it.
For example, the
