Avoiding Credit Card Fraud

December 13, 2009

Avoiding credit card fraud can help consumers keep their excellent credit rating, or keep their decent credit rating from getting any worse. There are many steps consumers can take in order to prevent identity theft, which leads to fraudulent credit card purchases. Taking care with personal records, maintaining secure practices with credit cards, and verifying information frequently are all effective methods of avoiding credit card fraud.

Personal Record Maintenance Reduces Credit Card Fraud

Carefully maintaining personal records, including bank statements, credit card bills, and store receipts, is absolutely necessary in order to prevent identity theft. Identity thieves can gather enough information from discarded papers to open a new credit card account in someone else's name. A credit card bill or receipt provides the thief with the ability to request a new credit card, or to make charges online, or by phone, using the consumer's credit card information.

Preventing the exploitation of personal papers is a simple task. Consumers must simply keep track of all of their personal papers, including store receipts. Any papers that are not needed should be shredded, in order to eradicate any traces of personal information.

Credit Card Security can Save an Excellent Credit Rating

Consumers who wish to maintain an excellent credit rating should keep credit cards secure by keeping physical custody of credit cards at all times. When a credit card is handed to a server in a restaurant, for example, and whisked out of sight for 10 minutes or more, a consumer has no way of verifying the security of the card. In order to prevent identity theft in this situation, a consumer should consider paying with cash, or walking the card to the register.

Verifying Credit Information Prevents Identity Theft

Reading credit card statements each month, and immediately disputing any questionable transactions can help consumers avoid credit card fraud. Credit card companies have dispute resolution processes that take identity theft into consideration, so consumers will not be liable for charges that were made by unauthorized individuals.

Frequent evaluation of a credit report is another important aspect of avoiding credit card fraud. Any credit cards that have been opened by an identity thief on behalf of a consumer will show up on a credit report. This allows the consumer to take steps to close the card, and dispute the charges.

Proactive Action Helps Save Credit Ratings

A credit rating can be seriously affected by credit card fraud, and the longer a consumer waits to take action, the worse the damage will be. Preventative actions, such as maintaining records and credit cards securely, can prevent identity theft in most cases. Immediate action on the part of the consumer, disputing charges to a credit card or accounts on a credit report, can help the consumer avoid the damage in the event that credit card fraud takes place. Combining preventative action with reactive action can help to maintain a consumer's excellent credit rating.