7 steps to protect your credit card data during the holidays
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Feliz Navi…fraud? It’s the most wonderful time of the year — until someone steals your credit card information. According to the 2022 Norton Cyber Safety Insights Report: Special Release – Holiday, 36 percent of Americans have been victims of online shopping scams during the holiday season.
When someone steals your credit card information to make purchases or open credit in your name, it’s known as credit card fraud. Fraud can hurt your credit score and cause unnecessary bills and stress — but there are steps you can take to protect yourself. Here’s how to stop credit card fraud from stealing your joy this holiday season.
1. Keep a close eye on your accounts
Monitoring your credit cards is a good idea year-round, but it’s essential during the holidays when scams and fraud run rampant. We get it. Life gets busy, and keeping tabs on your accounts might not be at the top of your to-do list. Aim to review your credit card statements at least once or twice a week during the holiday season. That way, you can catch any fraudulent activity and report it promptly.
According to the Federal Trade Commission (FTC), 389,737 people reported credit card fraud [PDF] in 2021. Thankfully, most credit card companies offer zero-liability fraud protection if your card is lost or stolen, and The Fair Credit Billing Act limits your liability on unauthorized credit charges to $50.
2. Use a digital wallet
Using a digital wallet may be a safer way to use your credit card this holiday season. You don’t need to carry a physical card around, which means you’re less likely to lose your card. Once you add your credit card to a digital wallet like Apple Pay or Samsung Pay, you can use it to buy gifts for everyone on your list.
Digital wallets encrypt and tokenize your card information, making it harder for thieves to access your data. With tokenization, your credit card number is replaced by a random number each time you swipe, meaning the merchant never sees your real card number. If you lose your phone, a thief can’t make purchases with your digital wallet without your passcode.
3. Stay vigilant for scams
Staying vigilant during the holidays can help you avoid falling prey to scams. There are many ways thieves steal credit card information, including the following.
- Email phishing. With email phishing scams, you’ll receive an email that may appear to be from a legitimate company, but when you click on a link or attachment, your information is stolen. How to recognize a phishing email? Look for spelling errors and inconsistencies in the domain name or email address.
- Skimming. Your card data can be stolen directly from an ATM or card reader. Some of the most common places this occurs are gas pumps and vending machines. Skimming devices can be anywhere, so always check the card machine before swiping.
- In-store scams. There are best practices to follow while shopping in stores to limit the chances of fraud. If you apply for a store credit card during checkout, be sure to write down your Social Security number (instead of saying it out loud). Always be aware of your surroundings, and cover your PIN when entering it on the pad.
4. Consider a credit freeze
A credit freeze, sometimes referred to as a security freeze, acts as a buffer against potential fraud. A credit freeze locks your credit report so potential lenders can’t access it. This prevents thieves from opening accounts in your name, but it also makes it harder for you to open accounts yourself. You will have to manually unfreeze your credit each time you want to apply for new credit, but the process typically only takes a few minutes.
An alternative is to sign up for fraud alerts, which require creditors to go through extra steps to verify your identity when opening new credit. Fraud alerts are less of a hassle, but a credit freeze offers more protection.
5. Shop online with virtual card numbers
Using a virtual credit card number is one of the best ways to protect yourself online. Virtual card numbers are linked to your existing credit card and replace your real card number for each online transaction. This gives you more control over who has access to your card information and limits your exposure in case of a data breach. Citi and Capital One offer virtual account numbers on select credit cards.
6. Enroll in all available security features
Credit cards come with built-in security features, but there are usually additional benefits that require manual enrollment. For example, Discover offers a free monitoring service that proactively checks your account for signs of fraud. However, you must manually sign up to take advantage of this benefit. Always ensure your contact information is up to date so your card issuer can reach you quickly in case of fraudulent activity on your account.
7. Monitor your credit
Another way to stay ahead of fraud is to monitor your credit. When reviewing your credit report, pay particular attention to anything that looks unfamiliar, such as:
- Phone numbers
- Credit card or loan accounts
- Collections accounts
- Judgments or liens
You can check your credit reports from Experian, Equifax and TransUnion for free once a year at AnnualCreditReport.com. If you want to monitor your credit more frequently, many card issuers offer free credit monitoring, such as CreditWise from Capital One. Alternatively, you can sign up for free credit monitoring through third-party apps, too.
What to do if your credit card information is stolen
Here are a few steps to take if your credit card information falls into the wrong hands.
- Notify your card issuer. The first thing you should do is notify your card issuer online, by phone or via the mobile app. Many banks allow you to lock your card instantly on the mobile app, which is helpful in a pinch.
- Change your password. Victims of credit card fraud (and other types of identity theft) should immediately update their passwords. If you need help keeping track of passwords, you can use a password manager like LastPass to generate unique passwords with a combination of letters, numbers and characters.
- File a dispute. If you notice suspicious activity on your credit report, file a dispute with the proper credit bureau. For example, if your Experian credit report has an account you don’t recognize as your own, file a dispute online with Experian.
The bottom line
Monitoring your credit card accounts and staying vigilant can go a long way in preventing fraud this holiday season. Though you can minimize the chances of fraud, you can’t eliminate the risk. Familiarize yourself with the steps to manage fraud so you can address it swiftly if and when it occurs. Though holiday shopping may leave you vulnerable to credit card fraud, a few extra precautions can help keep the season merry.