Protect Yourself Against Credit and Debit Card Fraud

A friend of mine recently had his debit card compromised. While his bank is resolving the issue and restoring the funds in his account, it has certainly been a hassle for him. As someone who has had my own share of credit card fraud, I know how frustrating it can be.

While there is no way to 100% avoid credit and debit card fraud, there are steps you can take to protect yourself against credit and debit card fraud, as well as at least minimize the amount of hassle and frustration you endure when fraud happens so you can continue operating “business as usual” without any “downtime” to your finances.

First, I recommend paying cash in “high-risk” areas when possible. Gas stations and restaurants are places where credit and debit cards seem to become compromised the most as there are card “skimmers” planted at some gas station pump card readers that can harvest your information, as well as handing your card to a waiter in a restaurant and leaving it unattended while the waiter runs your transaction can also be a recipe for a potential issue. When in doubt, pay with cash. Never insert your card into a reader that has strange or bulky items or excess wires sticking out of it. You can almost be certain there’s a “skimmer” embedded somewhere. Also, when donating to road-side charity stops or to the Salvation Army’s red kettles, always use cash.

Second, I recommend using a credit card vs a debit card for the majority of everyday purchases. While both offer fraud protection backed by zero-liability for fraud purchases, with a credit card, you can dispute the charge and simply not pay it and allow your bank to remove the fraud purchase. With a debit card, if the money is deducted from your account, you’ll receive your money back after the bank finished the fraud investigation. When using a credit card, you still need to practice responsible spending habits. Don’t treat your credit card as a “line of credit” but instead treat it like a “checkbook replacement”. Only charge what you really need and what you have the funds in the bank to cover, as paying high interest rates isn’t fun. I recommend a bank where you can either pay for the card each month in-person at a bank branch or through their mobile app so that you don’t have to deal with the hassle of mailing off a check, plus sending your check through the mail, while generally safe, is another potential issue if your check gets lost or stolen in the mail.

Third, there are a handful of times you are required to use a debit card simply because the merchant will not take a credit card. In those instances, I keep a spare checking account around with a small amount of funds in it and have a debit card linked to it instead of my primary/larger checking account. This way, if I need to make a purchase with a debit card, I do it from my smaller bank account so in the event of fraud, my primary bank account isn’t affected, and the criminals aren’t going to be getting much money while I wait for the bank to reimburse me. I even have one checking account with a super-low amount of money in it, but I also have a savings account with the same bank. I store most of the money at this bank in the savings account. If I need to make a debit card purchase, I can instantly move money from the savings account to the checking account to cover the purchase with the debit card while still keeping a tiny balance in the checking account so the fraud losses aren’t much.

Fourth, enroll in your card’s and bank’s transaction alerts. Visa card holders can enroll in Visa Purchase Alerts, and most banks and cards offer text, email, or app alerts even if a $1 transaction is made on your card or at your bank. By having this real-time info at your fingertips, you can instantly spot fraud when it’s happening and deal with it immediately. One item to beware of: make sure you speak with your bank and understand what their text fraud alerts are and the direct phone number of your bank’s fraud department. If you receive a “fraud alert”, never click any links that require you to sign into your online banking account, and only call the number on the back of your card or a number officially given to you by your bank. Some scammers have attempted to pretend to be my bank, offer a “fraud alert” and want me to sign into my online banking using a link they sent me. Had I have done that, I would have been scammed.

Fifth, choose a bank that offers greater security controls over card use. I personally like what Farm Bureau Bank and Old Glory Bank offer with their debit and credit cards. They both utilize an app technology called “Card Controls”. With their apps, I can set all sorts of restrictions on my card use. I can require that my phone be on me and send the GPS of my phone’s location when using the card in-person to confirm I’m at the merchant’s location. I can limit what states/countries I physically use the card so that if I’m not traveling, the card only works around my home location or state. I can limit merchant types or purchase types, as well as place other limits on my card use. Since using a card with “Card Controls”, I have seen a much greater reduction in fraud.

Sixth, have multiple cards for a “backup”, and use a different card for everyday purchases versus your recurring bills/services. This is one I was doing but am not doing at the moment but plan to re-implement in 2025. By keeping your recurring bills/services on one card and your everyday purchases on another card, if fraud does occur on your card, it’s easier to track down the source of the fraud, as well as if it happens to the card you use for everyday purchases, you won’t have to go back and update your card on file you use for bills/services. It is one less hassle to endure once you set it up.

Seventh, use mobile payment solutions such as Apple Pay (iPhone) or Google Pay (Android). I try to use Apple Pay when possible. A handful of merchants still aren’t accepting it, but most are now. When you use a mobile payment solution, the card number is never given to the merchant. It only is given between banks. There’s also a one-time “token” that is generated when making the purchase. These technologies make it far more difficult for fraud to occur, and setting up and using Apple Pay (and other mobile payments) are easy. For merchants that do not accept mobile payment solutions, use the chip in your card instead of swiping it. It offers a similar level of protection.

Here are just a handful of steps you can take to protect yourself from credit and debit card fraud. A little bit of protection goes a long way and reduces the amount of hassle you encounter in the future. There are other steps you can take such as use security software on your devices, use a password manager for your passwords (and generate random, complex passwords), use a VPN when on Public Wi-Fi, use identity-theft protection, and keep your data off of data broker websites. My friends at Cyber Team US offers all of these services in an affordable bundle backed by US-based technical support. Check them out today!