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How to identify credit card fraud, traps and scams

Watch out for suspicious emails, calls or text messages.

Every year, millions of Americans are subject to credit card scams and online fraud. Falling victim to card misuse can wreak havoc on your personal finances and can ruin your credit score.

While credit cards offer zero-liability policies that protect you against fraudulent charges, there are some strategies you can use to protect your account from fraud in the first place. The first step to protecting yourself is simply understanding how credit card fraud works and what kind of fraud or scam may be happening to your account.

How does credit card fraud work?

At the most basic level, credit card fraud is simply when someone obtains your credit card information and uses it to make unauthorized purchases. The act of credit card fraud can be performed with or without the physical card in hand, as only the card information is necessary to make a purchase online.

Indicators you may be a credit card fraud victim

To avoid being a credit card fraud victim, here’s what to keep an eye on:

  • Fraud alerts. If your card provider sends you a fraud alert, you may want to check out what it’s all about. Look out for any unusual charges.
  • Unkown credit card purchases. Check your credit card statement regularly. If you notice purchases you’re certain you didn’t make, you may be a victim of credit card fraud.
  • Unknown accounts or inquiries. Check your credit report regularly. If you notice accounts or inquiries you don’t recognize, you may be a victim of credit card fraud and identity theft fraud.

What are the most common types of credit card fraud?

Though the end result is usually the same, credit card fraud can occur in a few forms. Here are the most common ways your information could be compromised:

    • Card-not-present fraud.
      This involves your name on card, card number and CCV number being used to make online transactions, where there is no need for a physical card, a PIN or a signature.
    • Counterfeit card fraud.
      Fraudsters can get your credit card data through a method called skimming or they can buy it from black markets. Choosing a credit card with an EMV chip will make it harder to counterfeit. If you’re running a business, you should keep an eye out for fake credit cards as well.
    • Card skimming.
      This is the process of stealing your credit card information with a normal transaction. To achieve this, fraudsters use card skimming devices, which are usually attached to an ATM or any other card reader. The updated version is called credit card shimming where scammers try to steal information from the EMV chip.
    • Not-received fraud.
      This is when someone accesses your card before you do, such as through your mailbox when you’ve applied for a new card.
    • Application fraud.
      In this case, someone might apply for a credit card in your name, using your personal details and then use it to make purchases and cash advances. This is often linked to further identity theft issues, as they would need to be able to provide enough documentation to actually get approved for a card in your name.
    • Account takeover.
      Fraudsters call your bank and use your personal information like home address, SSN or even mother’s maiden name to pretend they are you. They can say your card has been lost and ask for a new card to be issued at a different location.
  • Phishing.
    Scammers can lure you into providing your credit card information by posing as your bank or an authority. Telephone phishing is the most common, but email phishing is also used.

What’s the difference between credit card fraud and identity theft?

Credit card fraud and identity theft are familiar bedfellows, in part because the methods for performing credit card fraud and identity theft are very similar. The major difference between the two crimes is the personal information stolen and how that information is used.

Credit card fraud

As explained above, credit card fraud only involves the information and data necessary to use a credit card for purchases. If you’re the victim of credit card fraud, you’re not held responsible for purchases made on your card. Because of this and other security protections offered by issuers, credit cards remain a safe payment method in most circumstances.

Identity theft

While credit card fraud involves your card information, identity theft involves your personal information, such as Social Security Number, birth date or bank account information. This information is stolen to perform certain tasks in your name, such as opening a credit line, writing checks or even obtaining a driver’s license. Your liability for debts incurred from identity theft are typically limited, though the recovery process can vary depending on your state.

Who do I contact if I suspect that my credit card has been used fraudulently?

Depending on your circumstances, you have two options:

  • Contact your bank.
    Call your credit card company as soon as reasonably possible. If you can’t manually freeze your credit card, your card issuer will.
  • Change your password and PIN.
    Log in to your online account and change your password. If possible, change your PIN as well. This can help you prevent further misuse of your credit card.

Compare credit cards with fraud protection

Name Product Filter values Rewards Purchase APR Annual fee
Chase Freedom Unlimited®
5% cash back on travel purchased through Chase, 5% on Lyft, 3% on dining and drugstores and 1.5% on all other purchases
0% intro for the first 15 months (then 14.99% to 23.74% variable)
This solid 1.5% cashback card gets even better with the addition of up to 5% back in categories like travel, drug stores and dining.
Chase Freedom Flex℠
5% cash back on up to $1,500 combined in quarterly categories you activate, 5% on Chase travel purchased through Ultimate Rewards®, 3% on dining and drugstores, and 1% on all other purchases
0% intro for the first 15 months (then 14.99% to 23.74% variable)
Get up to 5% cashback in rotating and newly added everyday categories. The refreshed Freedom Flex card has lots of earning potential.
American Express® Gold Card
4x at restaurants including delivery and Uber Eats; 4x at US supermarkets on up to $25,000 annually (then 1x points), 3x points on directly-booked flights and 1x points on other eligible purchases
See Pay Over Time APR

Rose Gold is Back

Earn up to 4x points on select purchases, a bevy of travel perks, and a welcome offer worth up to $600 based on our valuation with this upper-mid tier travel card. Terms apply, see rates & fees

Compare up to 4 providers

How to avoid credit card fraud

While credit cards are packed with security features to help keep your information safe, vigilance is still one of the best ways to avoid getting scammed. Check out our guide for stopping credit card fraud for more information.

Bottom line

Credit card fraud can be an overwhelming experience, but it’s important to remain calm and contact your card issuer as soon as possible. Also, be sure to avoid clicking on suspicious emails or answering suspicious calls that imitate your bank. Remember, reviewing and disputing your credit statements is a standard part of maintaining financial health.

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