HOW TO PROTECT YOUR BANK ACCOUNT FROM THE MOST COMMON CREDIT CARD SCAMS TODAY

By Matthew Kubler

It can happen to the best of us. Even if you were the child back in school that always covered up your answers, there was always another child that would find a way to cheat off of you. Credit card scams are not much different. You put in all this hard work, you get a good job and are mindful to pay your bills, in return, you are rewarded with having more credit available to you with higher limits. The challenge is that as your creditworthiness increases, so does the target on your wallet.

Identity thieves all across the globe are inventing new ways to gain access to your identity and credit, and they are working much harder at it than you are working at protecting yourself. The good news is that you do not have to.

Remember watching those nature shows growing up? There was always a pack of gazelles drinking at the water hole, and the camera man would quickly pan over to show you a cheetah ready to pounce. Was the objective of the cheetah to catch all the gazelles? No, they just needed one. The moral of the story is that you do not have to be the fastest gazelle, you simply need to avoid being the slowest one in the pack.

How to Detect Credit Card Scams

There is immense value in that gazelle-cheetah story as it relates to credit card scams. The gazelle can convince itself that it will never be caught by the cheetah because, so far in its life, it has not even been close to being caught. The cheetah, however, is indiscriminate, and if that gazelle lets its guard down, it may be next on the Savannah Lunch Menu.

So, the question is: how do you go about protecting yourself from the most common credit card scams? The answer is actually much simpler than you can imagine. The first thing to do is resolve yourself to the fact that even with your best efforts, something may occur. Once you realize that, you can move on to the next step which is teaching yourself to be aware of the potential credit card scams that are out there. Being aware of the pitfalls that lay ahead will allow you to be better prepared to identify life’s lurking credit risks.

Below is a few of the top ways you can identify credit card fraud. Some are just good old fashioned common sense, while others could be found in the James Bond movie. Either way, if you plan on using credit cards or debit cards in the future, remember to do so with your eyes open.

#1. Is That a Bear in Your Trash?

We act like our trash can is this magical place that makes everything disappear as soon as we throw it away. Unfortunately, this is not true, and it is a gold mine for identify thieves. Also known as dumpster diving, this method of credit card fraud has yielded millions of fraudulent funds for hucksters over the years.They can use anything, from utility bills to credit card receipts, to get enough information on you to either take over an account, or simply just your identity. So, the next time you hear something rooting around your trash, do not assume a bear or raccoon got into your yard. Assume the worst.

#2. Know Who is on the Other End of the Line.

Dialing for dollars is another tried and tested scam. Fraudsters can be very convincing in their sales pitches, and they know what will work on you. Whether they are drumming up support during the political season or trying to get help for a good cause through a charity scam, they know what heart strings to pull. Of course, like any good criminal, they will say whatever they need to just to get your credit card information.

The best approach is to only give to charity in person or through a website that you know is reputable. If you are really moved to action though, do some research before handing over your critical information.

#3. Mind Your Money.

Oftentimes, you do not have to be a participant in credit card scams. They may have come upon your information by cyber hacking or some other electronic method. In this case, the best way to identify the most common credit card scams is to be consistent and timely in checking your credit card transactions. Review your statements early and often and reconcile anything that looks out of sorts. The more quickly you identify strange events, the less expensive it will be on your bank account in the long run.

#4. Do Not Assume You are Lucky.

Another way that criminals try to steal your information is by acting like you have just won something. Trust me, Nigeria’s main export is not oil, it is credit card fraud. We have all heard stories about a disposed Prince from your family who requires your bank account information to wire you your inheritance.

While this is probably the most common one, it is not the only credit card scam today. Essentially, if you are being told you won or earned something that requires you to provide information, it is probably fraud. If it is not, your “winnings” will still be there after you do some research, so take the extra time to make sure you’re not getting duped.

#5. Do Not Open Strange Emails.

If you do not know who “TruePlaya420″ is, why would you want to watch a video of a dancing cat from them? When opening emails, you should first ask yourself, “would I let this person into my house?” If the answer is no, then delete the email. Why? Because credit card scammers can place viruses into tainted emails that load into your computer and capture all of your sensitive information. Data like your keystrokes when using your online banking account and passwords being entered can all be taken, basically, anything you do on your computer will be sent to credit card thieves.

The point of all this is not scare you away from using credit cards or technology as a part of your banking process, it is simply to make sure you’re mindful of the perils that exist. Take the appropriate steps to protect yourself from credit card scams and you will not be one of the gazelles at the back of the pack. If you find something suspicious immediately report it to your credit card issuer.

5 PURCHASES THAT SHOULD NEVER GO ON YOUR CREDIT CARD

By Luke Landes

This won’t surprise holders of cash back rewards credit cards, but the companies that issue your credit cards know where you shop. Issuers who follow their own guidelines need to know which purchases qualify for 1%, 2%, or 5% cash back, so each retailer is categorized.

The purchase analysis doesn’t end with categories, however; issuers collect precise detail about your spending. When that detail indicates you might be at a higher risk of defaulting on your credit, the issuers can quickly take action, like lowering your credit limit, raising your interest rate, or canceling your card entirely. The latest regulations can’t do anything about it.

You should be aware of this because of the possible downstream effects. Lowered credit limits, with all other things being equal, will negatively affect your credit score. With a significant downward change in credit score, you could have trouble qualifying for the best mortgage interest rates or trouble qualifying for credit at all. A lower credit score can cost tens of thousands of dollars over the life of a mortgage.

The goal for anyone concerned about the long term effects of a less than optimal credit score should be to reduce the chance of being labeled a risk. For credit card users that means becoming financially literate and shopping with retailers who are not associated with risky behavior.

Issuers are carefully watching credit card use by using computational algorithms and automated systems and where you shop. If your spending pattern changes and you increasingly become a customer of locations identified as high risk, your credit card account may be flagged for a higher default risk, even if you have excellent history paying your bills.

Be Careful What You Put on Credit

Don’t use credit cards for several types of purchases, suggests the American Public Media Marketplace. There is evidence that purchases like those below directly affect customers’ risk profiles.

1. Pornography, adult toys, and strippers. A general rule of thumb might be not to use your credit card for purchases you wouldn’t want broadcast on the front page of the New York Times. Based on the immense collection of data issuers have on spending, these types of purchases are common among people who going through difficult financial situations and are looking for some kind of escape. In general, according to issuers’ data, people who use credit cards in strip clubs or adult toy stores have a higher risk of default. As a result, the individual who conforms to this category is affected even if he or she does not pose a greater risk. Bachelor and bachelorette party goers beware, particularly if you make a habit of attending these functions.

2. Cash advances. Plainly, cash advances are signals of, among other things, financial trouble, financial ignorance, or gambling debt. With a cash advance from your credit card, you’re telling the issuer your income and savings are not enough to cover your expenses and you have no other sources of financial help. Even borrowing money from family would be better than taking a cash advance. If you’re using expensive borrowing to fund a gambling problem, issuers are justified in their identification of you as a credit risk.

3. Alcohol. Like porn, alcohol can be considered escapism. A cardholder whose behavior changes and begins shopping for alcohol more often, whether in liquor store or bars, will raise a red flag in the issuers’ systems. An increase in alcohol spending could signal financial problems as the unemployed and the broke may be more likely to drown their sorrows.

4. Lottery tickets. Playing the lottery for fun, with no expectation of winning, is not harmful. When the potential jackpots are large enough to start making the news, more people join in the game. Just avoid paying for the lottery tickets with credit cards. Doing so might give card issuers a reason for believing you are playing the lottery because you believe winning is your only hope for financial independence.

5. Discount stores. When your shopping patterns change from high end groceries to national discount retailers and dollar stores, you can be sure that the credit card companies take notice or their computers do. Even if you change your behavior simply because you’ve adopted a more frugal spending philosophy and are enjoying the increased savings account balances, issuers might be concerned that your income has dried up. Rather than call you to find out whether your situation has changed, it’s much easier for issuers to make assumptions and decisions based on those assumptions.

Use Cash as an Alternative

There are more high risk purchases that could harm your credit if you systematically or, in some cases, rarely use your credit card; paying mortgage bills with a credit card is one example. Issuers and credit bureaus collect an enormous amount of data about you and your spending habits, and the massive databases that store your purchasing habits are legal. If you want to avoid scrutiny, whether for the sake of your credit score, for your privacy, or for your reputation, the solution is simple: use cash.

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