If you have credit cards, there’s a good chance that sooner or later you could be a victim of credit card fraud.

According to the Federal Trade Commission, credit card fraud has been the most common form of identity theft since 2017 and it is getting worse. The FTC says that the number of reported thefts increased by 15% from the fourth quarter of last year to the first quarter of 2022. In November 2021, Security.org reported that 127 million American adults, nearly half the total in the U.S., have had a fraudulent charge at least once on their credit cards.

Credit card theft takes a variety of forms. Most obviously, if a thief gets their hands on your physical cards they might run up a big tab before you discover the cards are missing. Second, fraudsters constantly find new ways to dupe people using email, text, and phone messages. Third, data breaches at retail companies, credit bureaus, and elsewhere provide thieves with personal information that they can use to open credit card accounts in victims’ names.

While this sounds ominous, here is some good news:

  • If you are a victim of credit card theft, federal law limits your liability to $50 if you report the unauthorized charges in a timely manner.
  • Most major credit cards offer zero liability on unauthorized charges.

Debit and ATM Cards

The costs could be higher for thefts and compromises of debit and ATM cards, however. The FTC says it’s important for consumers who lose those cards to notify the bank or credit union that issued the card as soon as possible. Here are the important deadlines to know if your debit or ATM card is stolen:

  • Once you report the theft, you won’t be responsible for any charges or withdrawals after that point.
  • If you report the theft within two business days of the event, you will be limited to $50 liability.
  • If you fail to meet that deadline but report the loss within 60 days after you receive a statement from the bank, your maximum loss is $500.
  • Beyond 60 days, there is no protection.

Repairing the Damage

It can be a shock when you realize your credit card has been hacked, but you will need to take rapid action. Here are some of the immediate steps you should take when you realize you’ve been victimized:

  • Phone your credit card company or bank to report the loss as soon as possible.
  • File a police report and get a copy of it for your records. This could be important in repairing any damage to your credit.
  • Consider a credit freeze or fraud alert by contacting each of the three credit bureaus: Equifax, Experian, and TransUnion. Placing a freeze means that no one, including you, will be able to open a new credit account while the freeze is in place. A fraud alert makes it difficult for anyone to open a new account using your name — you need only contact one of the three credit bureaus to order one.

Although there are protections to limit your economic loss if you’ve been victimized by a credit card scammer, it’s still a headache. In addition to the phone calls to credit card companies, banks, police, and credit bureaus, you’ll need to cancel your current card, wait for its replacements in the mail, and then swap the new number into autopay and other payment accounts connected to the old cards.

Moving Forward

Once the dust settles and your life is back in order, a few helpful tips may help you avoid another hassle:

  • Beware of phishing scams and be aware that these scams are growing increasingly sophisticated. An email that appears to be from a government agency or a bank asking for your credit card number or Social Security number is sure to be fraudulent.
  • Don’t use unsecure websites. Use the ones with the padlock image on the left side of the address bar at the top of your browser.
  • Use a password manager. Don’t use one password that could give a thief broad access to your personal information and accounts.
  • Don’t trust public wi-fi for financial transactions.
  • Think about using mobile payment apps like Apple Pay or PayPal, which use technology that allows you to pay without exposing your credit card number.
  • Review your online financial accounts every few days and not just when you get a monthly statement.

Credit cards can make our lives much easier. But they are also targets of people who want to make your life miserable. It pays to be vigilant.

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Credit cards make our lives easier. That’s why they’re in bigger demand for thieves than ever before. Here’s how you can better protect yourself from them.

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