How to Stay Safe from Debit and Credit Card Fraud

Tips to protect yourself from credit and debit card thieves and what to do if you become a victim.

Laura Adams, MBA
5-minute read
Episode #258


How to Stay Safe from Debit and Credit Card Fraud

It’s not always possible to prevent debit and credit card fraud; however, your goal should be to become a difficult target so a thief will just move on. Here are tips to minimize the possibility of becoming a victim:

  • Never carry cards with you that you don’t need and if possible, carry them separately from your wallet.

  • Don’t keep your debit card PIN with the card or anywhere in your wallet.

  • Never loan your debit or credit card to anyone.

  • Never email your card number to someone or give it in response to an email solicitation.

  • Keep an eye on your card during purchase transactions and get it back as quickly as possible.

  • Never sign a blank credit or debit charge slip.

  • Monitor your credit card and bank accounts online at least once a week to watch for unauthorized charges.

  • Save your receipts in a safe place and then match them to your credit card and bank statements on a regular basis.

  • Shred all financial statements and receipts before throwing them away, even if they only contain the last few digits of your account number.

  • Opt for electronic bills and statements so you reduce the amount of paper mail you receive that contains confidential information.

  • When you’re shopping online, make sure the web page URL where you enter your card number begins with “https” instead of “http,” which indicates that it’s secure. Also, never enter any confidential information while you’re using an open, unsecured wi-fi connection.

  • When making a large purchase, or buying over the phone or online, always use a credit card instead of a debit card to limit your liability. I’ll tell you more about this in a moment.

What To Do If You’re the Victim of Credit Card Fraud

If you lose a debit or credit card or discover unauthorized charges on your account, immediately call the card issuer and report it. Your potential liability for fraudulent charges is different for debit and credit cards.

For a credit card, once you report the loss, you can’t be held responsible for charges you didn’t make. Here’s the great thing about credit cards: If you report a card theft before any fraud occurs, your liability is zero. And if you report it after a thief made charges, your maximum liability is only $50 per card.

For a debit card, your liability can be much higher and it depends on when you report the loss. If you catch it early and report a stolen debit card before any fraud occurs, you have zero liability. However, if you don’t catch debit card fraud early, here’s how much you could have to pay:

  • If you notify your bank within 2 business days, your maximum liability is $50.

  • If you notify your bank within 60 days after your account statement was sent to you, your maximum liability is $500.

  • If you notify your bank more than 60 days after your statement was sent to you, your liability is unlimited.

In other words, if it takes you more than 2 months to view your account statement and notice unauthorized charges, you could lose every penny in the account linked to the debit card, plus be responsible for overdraft fees and penalties. So never forget that using a debit card can be much riskier than a credit card when it comes to your financial responsibility for fraud.

The best way to catch a thief quickly and limit the damage caused by fraud is to understand how thieves get hold of your personal information and to monitor the transactions in your financial accounts on a regular basis.

How to Prevent Identity Theft

To prevent identity theft—which is when a thief opens a new credit card or loan in your name—you must monitor your credit report on a regular basis. I created a step-by-step video tutorial that shows you how in my free Credit Score Survival Kit. You’ll also get 3 top strategies to build excellent credit and find out where to get your free credit score with no strings attached.

Click here to download your free Credit Score Survival Kit!

Download FREE chapters of Money Girl’s Smart Moves to Grow Rich

To learn much more about smart ways to manage your money, get a copy of my book Money Girl’s Smart Moves to Grow Rich. It tells you what you need to know about money without bogging you down with what you don’t. It’s available at your favorite book store in print or as an e-book for your Kindle, Nook, iPad, PC, Mac, or smart phone. You can even download 2 free book chapters at SmartMovesToGrowRich.com!

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About the Author

Laura Adams, MBA

Laura Adams received an MBA from the University of Florida. She's an award-winning personal finance author, speaker, and consumer advocate who is a frequent, trusted source for the national media. Money-Smart Solopreneur: A Personal Finance System for Freelancers, Entrepreneurs, and Side-Hustlersbook is her newest title. Laura's previous book, Debt-Free Blueprint: How to Get Out of Debt and Build a Financial Life You Love, was an Amazon #1 New Release. Do you have a money question? Call the Money Girl listener line at 302-364-0308. Your question could be featured on the show.