Many people rely on their credit cards for day to day purchases, even if they don’t carry a balance. It’s much easier than cash in many ways, and if you lose your card you have some recourse. Cash is just gone.

The trouble is that there are so many things that can go wrong with a credit card. If you don’t catch on quickly it can be a major hassle to get these things taken care of.

Stolen credit cards

It’s just painful when your credit card is stolen. You have to report it, cancelling your old credit card with the company and having them issue you a new one. You have to check for purchases you didn’t make so that you won’t have to pay for them.

But compared to other possible problems, this is nothing.

Swiping credit cards

Sometimes a dishonest employee at an otherwise reputable establishment can steal your credit card information. This one is harder to spot since you still have your card. You don’t know that anything is wrong until you get your bill and there are charges you didn’t make on it.

Some theives have a card reader that holds your information for them. All it takes is a quick swipe, just as with the regular credit card terminal. Others will go low tech and just write out the information. In many ways that can be a greater risk for the theif, since writing takes longer, but still not that hard to accomplish.

Digging through your trash

Think about it. Just how careful are you to shred all receipts that contain your entire credit card number? What about mail that contains personal information? Do you take good care to dispose of all such information carefully?

These days you will only rarely be dealing with credit card carbons. They aren’t used very much anymore, and many receipts only show the last4 digits of your credit card number, making them relatively safe. But you still need to be sure, because a large number of purchases do still show your entire credit card number.

Getting your credit card information over the phone

Some scam artists trick consumers by calling them, pretending to be from a legitimate source, but needing your credit card information. They may pretend to be from MasterCard or Visa, for example. Never mind that you will never get a call from MasterCard or Visa; you would get a call from the issuer, such as CitiBank, Discover and so forth. Enough people will fail to recognize this that it is easy to fool them.

If you didn’t initiate the call, don’t share your credit card information. It doesn’t matter what they say. If you can research their phone number you can call them and be sure that the reason for calling was legitimate.

Computer generated card numbers

This is one of the hardest to beat, since you didn’t do anything to lose your information. All the scammer needs is one good credit card number and a computer to try to generate more that are related. With a computer it’s pretty easy for them to generate an entire range of numbers and test them.

So what can you do?

Perhaps the most important thing you can do is to pay attention to your credit card bills. If you notice unauthorized charges on your account, inform your credit card issuer immediately. Get those charges removed.

You should also always sign or write something on the back of your credit card. I know some people say don’t sign your card because it gives a sample of your signature, but so what? If nothing at all is written there, anybody can sign it.

But you could also just write “SEE ID” on the back. I often do this in combination with signing the back of my cards. It means that if the clerk is paying attention (rare), they will ask for my ID and confirm that I am the one using my card. It’s a very simple process.

You should also just be sensible about your card. Don’t share the number with anyone, shred receipts and statements as necessary, and don’t give out your credit card number over the phone or online unless you know it’s legitimate.

Keep a very limited number of credit cards. You really don’t need one for every store that offers. You don’t need to apply for every new, interesting card offer that comes your way. You just need one or two so that you have them when you need them. More just means that it is harder to keep track of your purchases and payments.

Technorati Tags: , ,