Credit cards can be a blessing – or a curse. If you’re the victim of identity theft, your financial future could be ruined. Depending on how much damage occurs, it could take years to correct your financial reputation. Even a lost or stolen credit card can cause major headaches. Here are some simple ways to protect yourself and avoid these unfortunate situations:
- Sign your credit card right now!
To help protect yourself against fraudulent use of a lost or stolen credit card, sign the back of your credit card immediately. Although not every merchant will look for a signature on the back of the card, this limits how (and where) a thief can use your credit card.
- Examine your monthly statement
Examining your statement is the single most important thing you can do to protect your credit. Keep your receipts and check your monthly statements carefully, comparing your your purchases with new charges. Notify the issuer immediately if you notice discrepancies.
- Report lost or stolen cards immediately
Although you have some financial protection from fraudulent use, lost credit cards can cause major headaches if not handled properly. Report the loss to the credit card company, as soon as possible. The card issuer cannot hold you responsible for any unauthorized charges, if you report the loss before your credit card is used. If the card is used before you have a chance to report it missing, the most you’ll owe is $50 per card.
- Use caution when ordering by telephone
Ordering by telephone is common, and normally safe. But always use caution when you’re asked for your credit card number over the phone, especially if you were contacted first. Don’t provide any information if you aren’t confident you’re dealing with a reputable company or sales person.
- Protect important documents
Maintain a list of all your credit cards, account numbers, addresses and telephone numbers in one safe location. If your credit card is lost or stolen, you will need this information to report your missing card. When you discard documents with account numbers on them, be certain that the numbers can’t be read. Never put your account number on the outside of an envelope or on a postcard. Draw a line through blank spaces on charge slips so the amounts cannot be changed.
- Protect your PIN number
Do NOT write your Personal Identification Number (PIN) on your card or carry with you in any form or fashion. Never choose a number that correlates with any other personal identification about yourself such as your birthday, address, phone number or social security number. These are the first numbers a thief will try to access your account.
Errors on Your Credit Card Statement
Provisions of the Fair Credit Billing Act help you settle disputes with your creditors about errors on your account statements. Keep in mind, these provisions only apply to revolving credit accounts such as credit cards, department store cards, and overdraft protection for your checking account. The Fair Credit Billing Act protects you whether you use your credit card online, over the phone, through the mail, in person or at a retail store.
If you disagree with an item on your bill, it’s your responsibility to notify the creditor in writing within 60 days of receiving the statement. Include your name, address, account number; the item you believe is in error, an explanation of your dispute and copies of supporting documents, such as receipts showing the correct amount of the charge. Be sure to explain the situation in detail. Look for contact information on the back of the credit card or your billing statement. Most credit card issuers have 1-800 numbers to report errors.
The issuer must respond within two billing cycles but no later than 90 days after the issuer receives your notice. While the error is in dispute, creditors cannot report to other creditors or credit bureaus that you have not paid the disputed amount. And until your complaint is answered, the creditor may not take any action to collect disputed funds. During the period that the issuer is investigating the error, you don’t have to pay the amount in question, but you’re still responsible for paying the remaining balance.
Lost or Stolen Credit Cards
Federal law limits your liability for unauthorized charges. If your credit card has been lost or stolen, you must inform the credit card issuer (in writing) within 60 days of receiving the billing statement containing the error. Send your letter to the address listed on your credit card statement. Be sure to include your name, account number, the date and amount of the disputed transaction and the reason you believe the billing error has occurred.
Send your letter certified mail, with return receipt requested, for proof of delivery. Once you’ve made contact with your credit card issuer, you are not responsible for any unauthorized purchases from that point forward and your total liability for the other unauthorized charges cannot exceed $50.
Protect Yourself while Shopping Online
While the Internet offers the comfort and convenience of shopping from home, the basic rules of ‘traditional’ shopping still apply. But be aware of the additional risks as well. Here are some helpful tips to make sure your online shopping experience is as safe and enjoyable as possible:
- Be cautious if you’re asked to supply personal information such as your Social Security number or bank account information. This should not be required for any purchase!
- Look for security information or an unbroken key or padlock (usually located in the bottom corner of your browser). This indicates that your credit card data is transmitted securely.
- Keep your passwords safe and don’t share them with other people.
- Make sure to print your receipts or save electronically any records related to your online transactions.
- Make sure you know the merchant’s policies. Before completing an online purchase, carefully read delivery and return policies and privacy statements on the merchant’s site.
- Don’t deal with sellers who are evasive and won’t give you contact numbers or addresses. Check that the site has a physical address so you can contact the business later if you need support.
- Don’t buy on impulse. Take your time in deciding to buy and don’t be pressured by “limited” offers. While there may be time limits, high pressure sales tactics can be a sign of fraud.
- Check the actual price it will cost you to receive the goods. Many offers are in foreign currency values and exchange rates can change quickly. Also check the freight or delivery method costs and whether the goods attract sales tax or import duty.
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