- Identity theft is often a crime of opportunity, so a little security goes a long way.
- Some credit card programs offer protection services, which range from free to nearly $20 a month.
- You can play an active role in preventing identity theft by reviewing your credit report regularly.
Understanding credit card identity theft
What is credit card identity theft?
Credit card identity theft occurs when thieves steal your credit card information to make unauthorized transactions or open new accounts in your name. This guide explains the significance of protecting your credit card information and the impact of identity theft on one's financial health.
Learn about the common methods thieves use to access your information, including phishing scams, data breaches, and skimming devices. By understanding these risks, you can better prepare to defend against them, ensuring your financial stability and peace of mind.
How common is credit card identity theft?
Credit card identity theft is very common, which is why it's important to remain vigilant. According to Experian, there were more than 214,000 reports of credit card fraud in the first half of 2024. The credit bureau also identified it as one of the most prevalent types of identity theft.
Essential credit card identity theft protection tools
Taking proactive steps can significantly reduce the risk of falling victim to credit card identity theft. Effective practices such as using strong, unique passwords for online accounts, enabling two-factor authentication, and safeguarding your personal information both online and offline are great steps to take. Using secure payment methods, like contactless payments and virtual credit card numbers, can further protect your financial data from unauthorized access.
Credit-monitoring services
Credit monitoring services notify you about any suspicious activity on your credit report, such as new account openings or significant changes in your credit score. You can also pinpoint changes to your FICO score so you can gauge how close you are to qualifying for an important loan or line of credit.
Fraud alerts
You can also set up fraud alerts for suspicious activities on your credit card. Many credit monitoring services give you the option to set up notifications, but your credit card issuer may also be able to help with fraud alerts.
Identity theft protection services
Identity theft protection services monitor your personal information, such as your credit card and Social Security number, to minimize the risk of fraud. Some of these services also come with insurance policies that minimize the financial impact of identity theft.
Many credit card issuers offer complimentary features designed to keep your finances safe in the event of identity theft. For instance, zero liability shields you from the expenses a thief incurs with your credit card, but it's still good to take protective measures.
Credit card issuer identity theft protection
Discover Identity Theft Protection
For $15, Discover cardholders can get fairly in-depth identity theft protection, including insurance coverage and tri-bureau credit monitoring. With services comparable to some paid identity theft protection services at a competitive price, this is an appealing option to Discover cardholders.
Discover also covers up to 10 children under the age of 18 at no extra cost, providing Social Security monitoring along with the same fraud resolution and insurance plans offered by standalone identity protection companies.
American Express CreditSecure
American Express aims to attract new CreditSecure customers with an introductory offer: pay $1 for the first 30 days. After that, the program is $19.99 per month, and it's fairly comparable to Discover's offering.
Chase Credit Journey
Chase's Credit Journey is a free service, and you don't have to be a Chase cardholder to use it. This is a strong option that won't add any weight to your monthly budget. I use it regularly to track my credit score, but it is important to note that the credit score they show you is from VantageScore 3.0.
This is still a helpful way of understanding how your history of payments and your credit utilization is impacting you in the eyes of a lender, but not all lenders use the VantageScore. Instead, most lenders use FICO to make lending decisions. There is also a simulator tool that allows you to see the potential impact of big financial decisions such as paying off all your debt or opening a new credit card.
The drawback is that you're only seeing your credit report from Experian. Since the three credit bureaus report things differently, this can feel like looking in one room of a house for robbers while failing to bother checking the two bedrooms in the basement.
Capital One CreditWise
One of the services listed in our guide on the best credit monitoring services, Capital One's CreditWise feels fairly similar to Chase's Credit Journey. Like with Credit Journey, you don't have to be a Capital One cardholder to use CreditWise.
You can't argue with free, and CreditWise allows you to monitor both TransUnion and Experian, whereas most free services on this list only monitor one bureau. With additional identity theft monitoring, a credit-scoring simulator, and a highly rated mobile app, CreditWise is a very appealing option. You can use other free monitoring services to get monitoring for that last bureau.
Mastercard ID Theft Protection
If you have a credit card with a Mastercard logo in your wallet, you're one tap away from activating the company's ID Theft Protection for no charge. Using the service is a no-brainer — some free identity theft protection is better than none at all.
However, Mastercard's coverage has the same downside as Chase and Capital One: It does not monitor all three credit bureaus.
Steps to take if you suspect credit card identity theft
Immediate actions to take
If you suspect that your credit card information has been compromised, act quickly to minimize the damage.
Some of the immediate steps you should take include contacting your credit card issuer to report the fraud, placing a fraud alert on your credit reports, and filing a report with the appropriate authorities. It's important to regularly review your credit report and statements, even after resolving the issue, to prevent future instances of fraud.
Reporting fraud to your credit card issuer
Every credit card has a phone number on the back. You can call that number if you have any questions, but it becomes even more important in the event of fraud. That's the first number you should call if you find fraudulent activity on your card. A representative will then inform you of what to do next.
Contacting credit bureaus
After calling your credit card issuer, you should proceed to contact the major credit bureaus: Experian, Equifax, and TransUnion. Each credit bureau can place a fraud alert on your credit report that encourages lenders to take extra steps before verifying your identity. These extra steps can thwart additional credit card fraud.
Credit bureaus can also freeze your credit report to prevent anyone from taking out credit under your name. However, freezing your credit report will also prevent you from taking out new credit until you unfreeze your account.
Preventing credit card identity theft
Best practices for online shopping
Using different passwords for all of your accounts is a quick and effective tip for staying safe when you shop online. You can also keep your identity safe by avoiding public WiFi, not answering spam texts or emails, monitoring your credit, and not saving your credit card information on any website.
Yes, it can be a pain to manually enter your credit card information on each website, but if your information gets leaked, your credit card information will still be safe. Some issuers also let you create virtual credit card numbers that you can turn off at any time. Virtual credit card numbers keep your official credit card number out of view.
Avoiding phishing scams and fraudulent emails
Be careful about clicking links in emails and text messages. Many fraudsters try to communicate via email while pretending to be a legitimate company like Amazon or PayPal. Luckily, there's an easy way to tell if an email is fake. All you have to do is check the sender's email address. If the email address is suspicious, you should ignore the email. Often the email address will look correct but will have one or two misspellings.
Using secure payment methods
Virtual cards and digital wallets are some of the secure payment methods that can reduce the chances of credit card fraud. These secure methods use protective features like tokenization and encryption.
Monitoring statements regularly
If you check your statements often, you can see credit card fraud in its early stages instead of watching your balance grow out of control. Addressing credit fraud quickly will lead to fewer headaches in the future. You can also monitor your statements regularly to stay on top of your bills and improve your credit score.
FAQs about credit card identity theft protection
Credit card identity theft is when someone obtains your credit card information and illegally uses it to make purchases.
Credit card identity theft protection involves setting up protocols that make it more difficult for thieves to obtain your credit card information. If credit card fraud occurs, a good protection plan can quickly thwart those efforts.
Yes, there are services that help prevent identity theft, including credit monitoring and fraud alert services.
If your credit card information is stolen, you should contact your credit card issuer. Every credit card has a phone number on the back of the card. Then, you should reach out to the major credit bureaus. You can place a fraud alert or temporarily freeze your account.
To set up a fraud alert on your credit card, you will have to call one of the major credit bureaus. A representative will then set up the fraud alert for you.
