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What is credit card fraud and how to prevent it from happening

Imagine while grabbing your groceries, you’re ready to pay and hand over your credit card. Beep… declined! What’s your first thought? Other than getting flustered that you’re holding up the queue and not being able to pay for your groceries (unless you have another credit card or cash on hand), it’s possible that your credit card has been fraudulently used!

Having your credit card details stolen is a pain to deal with and the best thing to do is to safeguard it from getting stolen in the first place. However, it’s important to know how to spot credit card fraud, what to do if it happens to you and how to protect yourself.

How credit card fraud works

The first thing most people would say when they find out their credit card details have been compromised would be, “How did this happen? I’ve been so careful!”. Credit card fraud can happen once a fraudster obtains your credit card details and uses it to illegally purchase goods and services.

The few ways your credit card details could’ve been stolen are:

  • Cloned when you made a physical transaction at a store (card skimming)
  • Stolen when you made an online transaction
  • Credit card details accidentally shown on social media or shared via email
  • Cheated into making a transaction on behalf of the fraudulent person
  • Card is physically stolen

Card skimming is when a criminal uses a credit card reader which stores credit card information. It can happen at ATMs and petrol stations where a replica is placed over the original card reader which then stores your card information when you make a transaction.

How to prevent credit card fraud

Go paperless with credit card statements – it’s great for the environment and keeps your credit card details away from a fraudster’s hands. All the person has to do is go through your trash to get their hands on your credit card statement and thus, your details. So, if you do get paper statements, always shred them after you’re done with them, then call up your bank and ask to go paperless. It also saves you some money!

Alright, you’ve gone paperless and receive your credit card statement over e-mail but you just download them without reading or check them every month or so. That’s how you might overlook any fraudulent charges. It’s best to hold onto your credit card receipts or take a picture of them, file them away in a folder then match them to your credit card statement. This is how to catch any unauthorised purchases and also to make sure the retailer isn’t overcharging you!

Always turn on your credit card account alerts via SMS or email whenever you charge anything on your credit card. Remember that credit card fraud isn’t just confined to Singapore so if you get an alert that you’ve just bought a hamster cage in Russia, it’s time to call your credit card issuer and dispute the suspicious charge.

| Related: What happens if you don’t activate your credit card? |

Make sure to keep an eye on your physical transactions as well. When you pay for meals or drinks at the bar or restaurant, make sure you can see what the employee does with your card. We mentioned credit card skimming earlier and it is also very common at bars and restaurants. All the fraudster (sometimes an employee of the establishment or pretending to be an employee) has to do is to discretely skim your card’s details while you’re not looking or busy with your friends. On top of this, if your card is one that requires a PIN, always cover the keypad when you’re entering the password in case there are people watching.

Do not share images of your credit card online especially on social media. If you’d like to upload a snap of your wallet or purse, remove any and all credit cards and identity cards to prevent your credit card details and potentially, your identity from being stolen. The best is just not to flash your credit cards online!

If you have to make an online purchase, make sure that it isn’t over public Wi-Fi networks because these are notoriously not secure and it’s best to make these purchases on your own personal mobile data as a precaution. Additionally, when you’re making an online purchase, always check the website URL. URLs that start with ‘https’ encrypts (secures) your information, protecting it from prying eyes. Conversely, websites that start with ‘http’ could mean that it’s unsecured and makes your information easily accessible to fraudsters.

What to do if it happens?

If you’ve just realised your credit card is missing, it’s best to report it lost or stolen to your credit card issuer. Even if you’ve misplaced it, it’s best to be safe than sorry.

A fraudster can make fraudulent purchases on your card without even physically having your card. So, as mentioned, you must keep an eye on all your credit card transactions via statements or online accounts. However, if your card was used to buy an illegal item or service, you can become liable if you ignore your credit card activity! A lot of fraudsters purposely make very small purchases on credit cards especially those with high credit limits so the transactions will slip past the credit card owner.

| See also: Credit card myths every Singaporean needs to stop believing |

Even if you spot an extra $1 charged on your card, inform your credit card issuer immediately. Call the hotline provided as soon as you spot it to report the charge. It’s possible that your credit card issuer may conclude that you’re liable for about $100 if you’re found not to have acted fraudulently IF you report it within the time limit which varies depending on credit card issuer.


Having a credit card is a major perk but it also makes you a target for credit card fraud. Keep a vigilant eye on your credit card when you’re out and make it a habit to check your credit card statements regularly. If you spot a charge you’re not sure about, no matter how small, call up your credit card issuer to report it.

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