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5 simple ways to avoid credit card fraud

By Rajiv Raj
April 19, 2016 09:29 IST
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So how does one protect themselves from misuse of their credit cards? Here are a few helpful suggestions.

Shweta, a software employee who travels frequently abroad and within the country as well was shocked to see her latest credit card statements. Her credit card bill was way more than she had expected it to be; almost double. She was all the more confused since her card was in her possession and she had never misplaced it.

On investigating with the card issuer she became aware that her card was being used by someone else as well. This apparently had been happening for months but earlier such transactions were small amount and had escaped her notice.

If you are as surprised as Shweta, then welcome to the hi-tech world of credit card frauds. It’s no more about keeping your credit card safe physically. What Shweta experienced was skimming, just one of the few innovative tricks that can be used to misuse a card.

Do not hand over the card to anybody

Being lazy or too trusting can land you in trouble. If you are at a restaurant and petrol pump do not be lazy and hand your card to somebody to be swiped. This has multiple pitfalls like:

a. You are not sure whether the amount that is being entered is correct or not or if multiple transactions are made

b. Revealing your PIN to anybody can be potentially dangerous

c. This is how skimming or cloning of cards is done. Skimming or cloning is popular credit card fraud technique wherein the data on the credit card’s magnetic strip is copied and this data is then used to make a cloned card, which is then used fraudulently but the billing is done to the original (unsuspecting) card holder.

Keeping the card and pin together spells rouble

When a credit or debit card is sent to you it clearly says destroy the PIN after using it once and changing it. Keeping the PIN in the wallet along with card is a bad idea; if the wallet is lost the person who finds it is free to use the card as s/he chooses to.

Again writing the PIN on the card is like a free invitation to misuse your card. If memorising is tough or you feel you can forget, then keep the PIN in a different location. Also don’t have the same PIN for multiple cards; it may seem simple to remember but can lead to big trouble.

Online safety is a must

Credit cards are increasingly being used online and online frauds are the biggest threats today. Few things that must be followed when using cards online or dispensing information online:

  • When making a transaction especially on a website for the first time make sure that the website is a secure one. A small lock in the address bar indicates that.
  • Do check the address of the website properly. There are websites which have names and are designed to look almost similar to popular and genuine shopping websites but they are fake websites designed to defraud customers.
  • Avoid unknown websites or those based abroad for transacting or opt for cash on delivery (COD).
  • Do not respond to any emails or phones that ask for your card details or PIN; no financial institution actively calls its customers to get these details since they already have it! In such an event inform the bank immediately.
  • Check with the card issuer about the security features of your card and be sure to be aware of them and their importance before using them online.

Statements are meant to be checked

The statements that are sent to you monthly are meant to be looked at and checked. Like in the above example, if Shweta had been careful, she would have detected small fraudulent transactions and would have been saved from suffering a big loss. Card issuers send out important safety tips and information which though may sound useless can come in handy. Do you know what to do if your card is lost?

Apply for alerts

When those trying to defraud you are trying to make the best use of technology it’s high time you did the same to keep yourself safe. Apply for alerts; so that for any transaction big or small, you get an alert. The minute you get an alert for a transaction that you have not made, you can act on it and save yourself from further loss.

All card issuers try their best to put in useful safety systems in place. It is up to the customer to be aware about them and use these features for her/his advantage. A misused credit card can lead to huge financial loss and a poor impact on the credit score as well.

Illustration: Dominic Xavier/

The author is a credit expert with 10 years of experience in personal finance and consumer banking industry and another 7 years in credit bureau sector. Rajiv was instrumental in setting up India's first credit bureau, Credit Information Bureau (India) Limited (CIBIL). He has also worked with Citibank, Canara Bank, HDFC Bank, IDBI Bank and Experian in various capacities.

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Rajiv Raj