7 Credit Card Scams to Watch Out for in 2024
With technology taking a new direction in 2024, credit card frauds continue to be a serious threat. With scammers exploring unique ways of stealing your money, particularly using the latest trends in technology. According to security.org’s 2024, 60% of credit card holders have been victimized by fraud in the US, and 45% have experienced fraud multiple times. If you have a credit card, you are prone to get targeted, so it is important to be informed of the latest fraud techniques for precautions.
Let’s explore more about credit card scams and how Free Debt Insurance can help you in such case.
What Is Credit Card Scamming?
The fraudulent activities that include stealing anyone’s credit card information to make unauthorized purchases or access their money. The scammers use various techniques, from high-tech approaches like hacking and keylogging to low-tech methods such as shoulder surfing. These scams can often go unnoticed until you see strange charges on your statement or your credit score drops unexpectedly.
7 Credit Card Scams to Avoid in 2024
Since credit card frauds are significantly improving, in terms of frequency and technology, it is wise to stay informed to take precautions. Some of them are:
Interest Rate Reduction Scam
One of the most common scams involves fraudsters calling or emailing you with offers to reduce your credit card interest rate. They may claim to be from a well-known financial institution and tell you that you qualify for a lower interest rate, but only if you provide your credit card number and other sensitive information. The scammer’s goal is to trick you into revealing your credit card details, which they then use to make fraudulent charges.
How It Works
- You get a call or email from someone pretending to be a representative of your credit card company.
- They often offer a deal to reduce your interest rate, involving pressure tactics or time limits to push you into making quick decision.
- The scammers asks for your credit card information through which they can steal your money.
How to Avoid It
- Immediately hang up any unsolicited call or emails asking for your credit card details.
- For any deal related to credit card, you should contact the company directly.
Charity Scam
Another common scam, particularly after major disasters or during holiday seasons, involves fraudsters posing as representatives of charities. They exploit people’s goodwill by asking for donations, claiming the money will go to support victims of a natural disaster, humanitarian crisis, or other cause. In reality, the scammers are pocketing the money or, worse, using your credit card information for fraudulent purposes.
How It Works
- You get a call, email, or message on your social media account from someone asking you to donate to charity.
- The scammers may even have a fake account and website to seem legitimate.
- After you give them your credit card information, they’ll steal your money.
How to Avoid It
- You must research the authenticity of a charity before making any donations. Use Charity Navigator to check if the charity is legitimate.
- Don’t give out your credit card information over a call or email.
Public Wi-Fi Scam
Using public Wi-Fi may be convenient, but it can also expose you to credit card fraud. Scammers set up fake Wi-Fi networks or intercept unsecured Wi-Fi signals in public places like coffee shops, airports, or hotels. When you connect to one of these networks and make a purchase online, the scammer can capture your credit card details and use them to make fraudulent transactions.
How It Works
- You connect to a public Wi-Fi network, not knowing that a hacker is monitoring the traffic.
- When you enter your credit card information to make any purchase or check your bank account, the scammers steal the details.
How to Avoid It
- Avoid making online purchases or entering sensitive information when connected to public Wi-Fi.
- If your routine involves using public Wi-Fi more often, use a virtual private network (VPN) to encrypt your data.
Reward and Sweepstakes Scam
Everyone loves the idea of winning rewards, but scammers take advantage of this by sending fraudulent emails or text messages offering fake prizes. These messages may claim that you’ve won a sweepstake or reward and ask you to provide your credit card information to claim the prize or cover “processing fees.” Once you provide your details, the scammer will use your credit card for unauthorized purchases.
How It Works
- You get an email or text on a social media account that you won a prize in a contest.
- They ask you to give them your credit card information to claim the reward aa a shipping or processing fee.
- Instead of getting a prize, all your money gets stolen.
How to Avoid It
- No legit sweepstakes or reward programs will ask you to give any fees or provide credit card information to get the prize.
- If you get any suspicious message, contact the company giving you the offer to verify.
Skimming and Shimming Scams
Skimming involves fraudsters installing a device on credit card readers (especially at ATMs and gas pumps) to capture your card information. Shimming is a newer technique where scammers insert a device inside the card reader to intercept data from your card’s EMV chip. Both methods allow the scammer to clone your card and make unauthorized purchases.
- A skimming or shimming device is installed on a card reader.
- When you swipe or insert your card, the device captures your card’s data, which the scammer can use to make fraudulent charges.
How to Avoid It
- Inspect card readers at ATMs and gas stations for any signs of tampering.
- Use mobile payments or contactless payment options to avoid swiping or inserting your card.
Overcharge Scam
In this scam, you receive a message claiming that you’ve been overcharged on your credit card and need to “verify” your card details to process a refund. The scammer uses this ruse to trick you into giving up your credit card information, which they can then use for fraudulent activities.
How It Works
- You get a phone call or email that you’ve been overcharged at a restaurant or at a shop.
- They’ll ask you to verify your credit card information to process the refund.
- After giving them the details, they use it to steal.
How to Avoid It
- Do not provide any credit card information over the phone or via email in response to unsolicited requests.
- If you suspect any problem with your account, go directly to your credit card issuer.
Phishing Scam
Phishing scams are one of the most common types of fraud. In this scam, you receive an email or text message that appears to be from your bank, credit card company, or another trusted organization. The message urges you to click a link and provide your personal or financial information. These links often lead to fake websites designed to steal your credit card details or install malware on your device.
How It Works
- You get a message claiming that there’s an issue with your account and that you need to click the link to resolve it.
- The link is redirected to a fake website where you need to enter your credit card information.
- Once you enter details, your credit card is charged.
- Never click on links in unsolicited emails or text messages.
- Always log in to your account directly through the official website, not through a link in a message.
How to Protect Yourself from Credit Card Scams
As scammers continue to develop new methods of fraud, it’s important to stay vigilant and protect your personal information.
Here are some additional tips for safeguarding your credit card data:
- Monitor Your Accounts: Regularly check your bank and credit card statements for unauthorized charges.
- Set Up Fraud Alerts: Many credit card companies allow you to set up real-time alerts for suspicious transactions.
- Take Credit Card Protection Insurance: Most debt protection companies offer credit card protection insurance in case of stolen credit card.
- Use Secure Payment Methods: When shopping online, make sure the website uses secure payment methods and encrypted connections (look for the “https” in the URL).
- Be Cautious with Your Information: Never share your credit card details over the phone or online unless you are sure the request is legitimate.
- Consider Identity Theft Protection: Services like identity theft protection can help monitor your accounts and alert you to any suspicious activity.
Take Control of Your Financial Security
Staying informed about the latest credit card scams is one of the best ways to protect yourself from fraud. By recognizing the warning signs of these schemes, you can avoid becoming a victim and keep your financial information safe.
Additionally, some services now offer Free Debt Insurance, which can help protect you against unauthorized credit card charges and give you peace of mind if your card is ever compromised. Consider signing up for such services as an added layer of protection for your financial security in 2024.