Fifty-six million. That’s the number of cards stolen within five months from Home Depot, overshadowing the huge Target leak last year by sixteen million. Credit card fraud and identity theft can be devastating and life-altering if not caught early. Instead of pretending fraud could never happen to you, take a few simple precautions to protect yourself, your family, and your peace of mind.
1. Check Your Credit Report Every Year – For Free
Each of the 3 credit bureaus are obligated by law to provide you with a free credit report once annually. Experian, Transunion, and Equifax may all report slightly different numbers for your score, so use all three providers to get an idea of what your base score is.
Some companies like Credit Karma offer credit monitoring, which can notify you whenever changes occur in your credit file, like a mysterious new student loan you didn’t approve. For those who suffered from the recent data leaks, Home Depot is offering customers this service for free.
While it’s important to check for any signs of fraudulent activity, the most important benefit of knowing your score inside and out is that it becomes much easier to spot illegal activity down the road.
2. Be Wary of Giving Out Credit Card Information
Avoid giving your credit card number out to anyone unless you can absolutely verify their identity. Financial institutions will never ask for your credit card number or other sensitive information when they contact you – they should have this information already. To be safe, if you are contacted by a bank or other institute, call them back or email them from the contact information you already have.
Online, make sure not to enter payment information with merchants you are unfamiliar with. Be sure to do a quick search to verify their reputation, and check for any scams or consumer alerts. If something feels off, it probably is.
3. Protect Your Physical Credit Cards
Be wary of lending your card to anyone, even close family members or friends. Even though they might not steal your information, adding an extra step to safeguarding your card leaves too many opportunities for theft.
To minimize losses due to physical theft, store credit and debit cards outside of your purse or wallet, and only carry whatever cards you need for a particular outing.
Keep your eye on the card during transactions, and make sure you get it back before walking off. It’s easier to make this mistake than you think, and hard to remember where you’ve lost it once you leave.
And, for those with cards using Radio Frequency Identification (RFID), protect your cards from electronic pickpockets by using an RFID-safe credit card sleeve.
4. Take Extra Precautions With Your Computer and Other Devices
Hackers and thieves have gotten better and better at stealing your information online. You should already be using a full anti-virus and firewall suite on your computer, which helps prevent hackers from eavesdropping on your online transactions. But don’t forget your phone! Any device you use to pay bills or make online payments needs to be protected, too.
Don’t be lazy with your online passwords, either. Instead of using the name of your dog as your password for both email and your bank account, consider making the passwords to access your bank, credit card, and other important financial information something harder to guess.
Even better, use a different password for every web site and account. Even though it’s a hassle at first, you’ll have peace of mind knowing your information is safer.
5. Consider Using Credit Instead of Debit
Simply put, using debit places a greater burden on you in case of theft. Although the maximum liability a consumer faces for stolen card purchases is only $50, you can be responsible for hundreds on fraudulent debit transactions. Even if you report the fraud early, your bank may have certain policies in place that hold you responsible for a greater chunk of the money.
Make sure you check with your bank to find out their policies on canceling stolen cards, liability for fraudulent purchases, and whether or not they have a 24-hour line available for loss and theft.
6. Destroy Sensitive Documents
Even though high-profile data leaks like Home Depot’s latest issues make the headlines, many cases of identity theft still occur from the usual suspects, like sifting through garbage looking for personal information. Spend a few extra minutes shredding pre-approved credit cards and any other documents containing your financial information. A few minutes now can save you dozens of hours, thousands of dollars, and countless headaches later.
7. Report Losses and Fraud Immediately, and Freeze Your Credit
Once you realize your credit card has been lost or stolen, call your issuer’s toll-free, 24-hour hotline. You may be on the hook for any purchases up to $50 before the card is reported stolen, but any charges made after the report aren’t your responsibility. In addition, some card issuers may require you to sign a statement saying you didn’t make the purchases, but the entire process is very simple.
In addition, consider placing a security freeze on your report with each credit bureau. A freeze stops anyone from accessing your credit score unless you give them access, meaning the thief who stole your identity can’t get a car loan in your name.
You can’t stop Home Depot or Target from losing millions of customer credit card numbers, nor can you stop a diligent thief from poring over your trash when you aren’t looking. It may seem pointless to take all of these precautions when high-tech hackers can bring corporate giants to their knees. But, if you follow the advice above, at least that crook in your garbage won’t have anything to find but banana peels and coffee grounds.