Credit card fraud: How to help keep your credit cards safe

Maybe this sounds familiar: You open your credit card statement and start skimming from the top. About halfway down, you notice a charge you don't recognize. Why would you have made a $307 purchase from "K006 9968 ESTOR800-331-0500 US"?

Not only is it frustrating to stop everything and dispute the charge with your credit card company, it's also a threat to your financial security. If you don't detect the fraud immediately and report it to the card issuer, it could result in late payments or high credit usage on your report. Ultimately, it could impact your credit score.

According to a report from the Federal Trade Commission, close to 442,000 people reported credit card fraud in 2022.^{See note1} Those numbers are an increase from 2021 by about 13%.

Any time there's a major catastrophe or event like COVID, fraudsters kick into high gear and look for opportunities to prey on people who may be struggling. They're hoping to catch you at a time when you're emotionally and financially stressed.

The holidays are also a time to stay on high alert. People tend to spend more, travel or change spending habits.

When it comes to credit card fraud, early detection and immediate action can minimize the damage.

How does credit card fraud happen?

It's a common misconception that credit card fraud and identity theft are the same. In reality, credit card fraud is a form of identity theft, in which criminals make purchases or get cash advances using your credit card.

Here are a few common types of credit card fraud.

• Your physical card is stolen. This is the scenario most people imagine when they think about credit card fraud. Maybe you accidentally leave your credit card at a restaurant, or maybe your wallet or purse is stolen. Other times, thieves steal newly issued cards from people's mailboxes.
• A thief steals the information on your card. This can happen when you use your card at a retailer or when you get gas. Fraudsters put a device called a "skimmer" over the card reader and wait for you to swipe your card. When you do, they get a copy of the information on your card. Consider safer alternatives such as using the chip or tap to pay features of your card.
• A criminal takes control of your account. Once someone has your personal information, such as your birth date and Social Security number, they can use that information to change your PIN, mailing address and password so they control your account.
• Your information is obtained through a data breach. If a cybercriminal hacks the database of a company that has your personal information on file, they can gain access to all kinds of information, ranging from your name and account number to your card's security code. This can all happen while your credit card is safely tucked away in your wallet.

Don't let credit card fraud lead to identity theft.

They aren't the same, but credit card fraud can lead to identity theft. Once someone has your credit card information, they can use it with other personal information and assume your identity.

They can withdraw money from your bank account, open new credit cards, apply for loans or even apply for employment with your information.

There are several signs of identity theft. Here are a few to watch out for.

• You stop receiving bills or other mail.
• There are suspicious charges on your accounts.
• You get a credit card in the mail that you didn't apply for, or information about services you didn't buy.
• You're unexpectedly denied credit.
• You receive notice from the IRS that more than one tax return was filed in your name, or you have income from an employer you didn't work for.

Take precaution to protect your Social Security number, the most valuable piece of information for identity thieves. Don't store your Social Security card in your wallet or purse where it can be stolen or lost. Once a thief has your Social Security number, they can use it to set up new accounts or receive benefits in your name.

It's important to remember that USAA will never ask you for personal information, such as your account numbers or password via email. Do not respond to any email that asks you to update your personal information online or by dialing a telephone number. Only use the customer service numbers listed on usaa.com, or by calling the main number 800-531-USAA (8722) and following the prompts.

If you receive a suspicious call from someone claiming to be USAA who requests credit card account information or security credential information, hang up. Learn more about how to report identity theft, lost cards or suspicious activity.

USAA members can further protect their USAA account by using one of several enhanced methods that offer secure and fast login. And if members are victims of identity theft, they have access to a range of resolution services, including notifying credit bureaus.

Tips for guarding against fraud

As a credit card holder, you can help guard against fraud by setting up mobile alerts. For example, USAA invites members to sign up for text messaging, so they get a notification anytime we suspect incidents of financial or identity fraud on a USAA Bank account. We also send security and fraud alerts when changes are made to members' personal information or security settings.

Sometimes, credit card fraud can be beyond your control. For example, there's not much you can do to stop a cybercriminal from hacking a company that has your personal information on file.

But you can help by visiting only secure websites. And once you enter your credit card information, resist the urge to save it online — even if it's a retailer you trust.

It's also up to you to ensure credit card security by routinely checking for signs of fraud.

• Make it a habit to review your credit card statement, whether you receive the statement by mail or online. You want to look for unfamiliar transactions. If you notice anything unusual, immediately call your card issuer. The card issuer will help you verify whether you've been the victim of fraud. If so, they'll remove those charges, close your account and issue a new account number. At USAA, this will fall under the zero liability for unauthorized credit card transactions policy.^{See note2}
• Check your credit reports at annualcreditreport.com.^{See note1} It's free to download reports from all three national credit bureaus — Experian®, TransUnion® and Equifax®. You're looking for anything unfamiliar, such as credit card accounts you didn't open, loans you didn't apply for, and incorrect employers or other personal information, such as addresses. If you see any inaccurate information, you can file a credit report dispute.

If you have concerns about credit card security, you can notify the creditor via the contact information listed in the credit report.

Finally, when you request a new or re-issued credit card, be sure to ask when you should expect it to arrive. If you don't receive it or you discover that it's lost or stolen, immediately file a report with the credit card issuer.

Learn more about protecting your accounts.

Are payment apps safer than credit cards?

Over the last few years mobile "peer-to-peer" payment apps have skyrocketed in popularity. In part, that's because these contactless apps let people transfer money quickly and easily through their phones.

USAA allows members to add their USAA Credit Card to their digital device. Instead of using a credit card, you can make secure online or in-store purchases through your Digital Wallet. This helps protect you against data breaches because your credit card account number is never exposed. If a merchant or retailer is hacked, your account number will stay private.

Your financial security is important to us. That's why USAA is here to help you feel safe and confident while using your credit cards. Learn about how you and USAA can work together to help protect your accounts.

The USAA Advice Center provides general advice, tools and resources to guide your journey. Content may mention products, features or services that USAA Federal Savings Bank does not offer. The information contained is provided for informational purposes only and is not intended to represent any endorsement, expressed or implied, by USAA or any affiliates. All information provided is subject to change without notice.