What are the rising credit card scams and how do you prevent them?

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A credit card is a financial instrument that helps make transactions without cash. The banks provide it to the credit card holder with an already set limit for credit. For example, a person can use a credit card to buy goods and services from online and offline stores. Then the person pays for the credit card later at some point in time.

Credit card scams are occurring all over the world. But, since people are responsible for their own credit cards, they end up getting charged for transactions that they didn’t even undertake. Hence, Credit card holders should take care of their credit cards to avoid scams.

How do credit cards function?

The functioning of a credit card is as follows:

  • It is known that purchases can be made online or in stores with credit cards. Credit card holders can also pay their bills using it.
  • While using a credit card for those purposes, the merchant’s bank receives your card details.
  • The credit card network gives authorization to the bank to process the transaction.
  • Then the card issuer verifies your information and would either approve or decline the transaction.
  • If the transaction is accepted, the payment is made to the merchant, and the transaction amount would reduce the available credit in your credit card.
  • By the end of your billing cycle, your card issuer will issue a statement that mentions all of the month’s transactions, your previous balance and new balance, your due payment, and the due date. 
  • For paying a credit card bill, there is a grace period given by the credit card issuer, which lies between the date of purchases on your credit card and the due date listed in your statement.
  • When you pay your credit card bills on time, there are no interests charged. But if the due date is crossed, the credit card issuer charges you interest.

How do credit card scams take place?

Credit card scams take place in various ways. The methods used by credit card scammers are mentioned below:

  • A credit card scammer may go through your trash and get hold of your discarded receipts or credit card statements that include your account number. They then use this information to steal money from the victim.
  • The scammer provides a link through a text or email that takes you to a spoofed website where you will be asked to provide your credit card information. The thief would then use this information to make false purchases.
  • At times your credit card information is stolen without your fault. Your credit card number may get exposed in an information leakage that has hit your favorite retailer. Scammers may then use this information for fraudulent purchases.
  • Online scammers can buy credit card numbers that are stolen and are on the dark web. The dark web is only accessible through a special software.

What are the rising credit card scams?

Various credit card scams are targeting most credit card holders worldwide.

● Public Wi-fi scams:

The hackers make use of public Wi-fi and then use that to steal the user’s credit card information. Some scammers create fake Wi-fi signals with embedded tracers that can access the user’s credit card details. While credit card users enter their credit card data on their devices, their information gets stolen.

For example, A is sitting in a public place and is accessing the public wi-fi. Then A will do the online shopping by using a credit card. After a few days, A will notice fraudulent transactions on the credit card. After enquiring with the credit card company, A realized that the scammer had stolen his credit card information. The scammer was able to access A’s credit card details through the public wi-fi.

● Reward scams:

The tricksters know that most people shop online. And hence they always look for a way to trap the shoppers who are looking for offers. In reward scams, the fraudsters promise the shoppers discounts or coupons in return for their purchase.

Instead, the victims may get an email or text that looks like a professional one, based on the message that it passes and its design. But instead of valid rewards on credit cards, this scam asks people to click on fake links that lead to malware downloads. Once that happens, scammers can access your credit card data.

● Overcharge scams:

In overcharge scams, the scammers send emails or make phone calls to inform you about an overpayment done from your credit card account. But to access your refund, you must first verify your credit card number. In reality, there is no overcharge. It’s the scammer’s adopted technique that paves their way to the cardholders’ data.

● Card fraud department scam:

In this scam, the trickster calls you and claims to be from the credit card company. These tricksters usually have essential details such as your name, address, and place of work. They utilize these details to build trust and appear professional. Once your credit card information gets in their hands, they mention that fraudulent transactions are taking place on your credit card. They also state that if you don’t give them the required details, then you will be eligible for the payments due on these transactions. The information they seek is none other than your credit card details.

● Skimming:

In the skimming process, a thief uses an electronic device called the skimmer to steal your credit card details. It helps load the information into a fake card, which can then be used as a credit card.

The skimmers are pretty challenging to identify. They more often look like regular card readers. The only alternative way to say if a skimmer is being used is by gently pulling on the card reader to ensure that it is the actual one. If the popping-off does not occur, then it is not a skimmer.

● Spyware:

The software that secretly gains information about the activities performed by your computer is a spyware. Spywares get into your computer when you visit harmful websites or download harmful software. To prevent spywares, use an antivirus software and avoid clicking on links and downloading files that you cannot trust.

● Online shopping scams:

The trickster sets up fake eCommerce sites to steal shoppers’ credit card details. They may create these sites to make themselves appear as actual stores, with trademarks, stolen professional images, and “https” in the URL.

  • Visa and MasterCard telephone credit card scam:

In Visa and MasterCard telephone credit card scams, the scammers pose as credit card representatives to trap the customers. They ask the victims for the three-digit security code on the back of their credit cards or other personal information. This scam works in the following manner:

  • The victim receives a call from a credit card company, especially the person who works in the “Security and Fraud Department.”
  • The trickster mentions that your credit card is flagged, and you must provide evidence that you are the actual credit cardholder.
  • Finally, you will be requested to provide the three-digit security code to prove that you have the ownership to your card.

What are the preventive measures for credit card frauds?

Most people become victims of credit card scams and lose their money. To avoid getting trapped in a credit card scam, its preventive measures are as mentioned below.

  • Remember to store your credit card safely and make sure to use it carefully.
  • Please do not share your Identification Number, and don’t use easy numbers as your credit card PIN. Instead, use the numbers which are pretty challenging to remember.
  • Hide the credit card PIN as you type it into a machine so that the cheaters cannot have a glance at it or get the chance of leaking it.
  • Please do not give your credit card information through phone or email.
  • Check your credit card transaction history, bank statements, and credit card report to make sure that there is no such activity that you are unaware about.
  • Please make sure to completely cut the chip and magnetic strip while disposing of your old credit card.
  • Remember to shred paper copies of your credit card statements.
  • Keep all unused credit card accounts private.
  • Before signing the bill, please thoroughly verify the amount on your credit card receipt.
  • Credit card users should review their credit card statements every month.
  • Please store your credit card in your wallet or purse so it always remains close to you and can’t be quickly snatched away.

What are the benefits of using a credit card?

By using the credit card, you will have the below-mentioned advantages.

● Most accepted payment method:

You may use a credit card to buy anything of your choice when traveling anywhere. Therefore, even if you are out of money, you can handle carrying a little money through your credit card. Furthermore, since it is the most accepted method, you can easily manage to pay for anything through a credit card.

● Travel is easy:

The usage of credit cards during travel has become crucial. Sometimes, when we want to buy something we like, on the spot, using a credit card makes the payment easier, even if you don’t have any cash handy.

● Safety offering:

When you have a credit card, you need not carry much cash.

● Record keeping:

The credit card statement will give you a monthly record of your expenses. You can quickly know your monthly expenditure with the help of your credit card statements.

● Builds financial health:

When you pay your credit card bills on time, you will have a healthy financial status. In addition, you will be free from interest payments for the amount spent in your credit card bill.

Conclusion:

Credit card holders should be aware of credit card frauds, practicing caution as they use their respective credit cards. The more they are careful with their credit card usage, the safer they are from credit card frauds.