Ins and Outs of Protecting Your Identity When Using a Credit Card

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According to the Federal Trade Commission, more than 393,000 of the almost 1.4 million reported cases of identity theft in 2020 involved credit card fraud. It happens at restaurants, at gas stations, on smartphones and over coffee shop Wi-Fi. Some criminals make purchases that the cardholder never winds up having to pay for. Others open accounts using their victims’ identities, pilfering and plundering in their names, and leaving their credit in smoldering ruins along the way. 

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Read: Jaw-Dropping Stats About the State of Credit Card Debt in America

The good news is that the power to prevent all of that is in your hands.

“Whether you use credit cards in person or online, taking a few simple precautions can help you avoid becoming a victim of identity theft,” said Laura Adams, MBA, a personal finance expert for Finder.com.

Here’s what to do — and what not to do — to keep you and your personal data safe while using a credit card. 

Earn More Perks From Your Credit Card

Shop Only on Private and Secure Connections

You know that the Wi-Fi in your home is secure because you secured it — hopefully, houseguests have to ask you for a password if they want to join your network. According to Norton, there is no way of being sure that any public network is secure, so you should always assume that the one you’re using while you’re on the road is not.

“Since someone could steal your card data over a public wifi connection, shop only using your own device and a private connection,” Adams said.

Just browsing on a public and/or unsecured network is one thing, but never conduct a credit card transaction after joining a Wi-Fi network in places like: 

  • Cafes
  • Airports
  • Hotels

Cover Your Tracks With a VPN

If you absolutely must make a purchase on an unfamiliar Wi-Fi network, use a virtual private network (VPN) to keep your transactions hidden. VPNs redirect your internet traffic through a secure pipeline and hide your IP address. That kind of cloaking can go a long way in protecting your card from the so-called man-in-the-middle attacks that Norton says claim so many victims on public Wi-Fi networks.

Keep Reading: 30 Things You Do That Can Mess Up Your Credit Score

“A VPN, in my opinion, is essential when accessing public wifi from a Starbucks or on your travels,” said Paul Knag, founder of consumer financial site Ratezip.com. “This advice also goes for your smartphone or iPad, not only the computer.”

Even when you’re on a secure and trusted network, covering your tracks with a VPN is never a bad idea — unless, of course, your streaming service blacks you out until you shut it off.

“I recommend the use of a VPN both at home and at the office,” Knag said.

More: 10 Things to Do Now If You Have a 500 Credit Score

Pay Using a Digital Wallet

Just as VPNs hide IP addresses, digital wallets hide credit card numbers, adding yet another layer of security to online transactions. 

“Third-party digital wallets, such as Google Pay and Apple Pay, give you more protection because they tokenize your data, which means your credit card data doesn’t get revealed to merchants,” Adams said. 

Earn More Perks From Your Credit Card

According to Captial One, mobile payment services like PayPal, Zelle and Venmo use similar technology to protect your card.

Helpful: This Easy Trick Will Improve Your Credit Score and Avoid Late Payments

Two-Factor Authentication Is a Hassle — For Criminals

You might not like to go through the extra step of entering a code sent via text message just to complete a purchase. But this extra layer of protection keeps your accounts secure by making sure you are actually the person on the other end of that transaction.

“Many credit cards or apps offer two-factor authentication, which requires a second step, such as a text or email, to log in to your account,” Adams said. “If a thief got your login data, having authentication would block them from accessing your account.”

Tips: I Use These 3 Foolproof Strategies To Avoid Credit Card Debt

Create Account Alerts

When you put a physical debit card into an ATM machine and type in a password, that’s a kind of two-factor authentication, according to Credit Karma — you authenticate your identity by providing both something you have (the card) and something you know (the password).

Anytime there’s a transaction that doesn’t include that second authenticating factor — a physical card — have your bank tell you about it.

“Most credit cards allow you to create text or email alerts for transactions that occur without your card being present, such as for online purchases,” Adams said. “That can help you know when someone uses your credit card without your permission and report it to the issuer right away.”

Discover: 10 Credit Score Myths You Need To Stop Believing

Review Your Transactions

Finally, remember that even though everything with your credit card is automated, you’re still ultimately responsible for keeping track of your purchases — and sometimes, the most effective security measures are also the most basic. Do what your parents did. Look over your statement at the end of every billing cycle. 

“While it may be impossible to prevent card fraud entirely, the sooner you spot it, the easier it is to repair,” Adams said. “Always review your card account or statement for any unauthorized transactions and dispute fraudulent charges immediately.”

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Last updated: Oct. 6, 2021 

About the Author

Andrew Lisa has been writing professionally since 2001. An award-winning writer, Andrew was formerly one of the youngest nationally distributed columnists for the largest newspaper syndicate in the country, the Gannett News Service. He worked as the business section editor for amNewYork, the most widely distributed newspaper in Manhattan, and worked as a copy editor for TheStreet.com, a financial publication in the heart of Wall Street's investment community in New York City.

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