More than 191 million people in the United States have credit cards with the average person having 2.7 or more cards. A recent study by showed that 42% of the United States adult population had a credit card with their main bank or credit union. Clearly a significant percentage of the population uses at least one credit card. While credit cards offer several benefits including increasing affordability, convenience and the ability to earn points, they can also be risky as credit card scams are a real problem. About 30 percent of credit card users have fallen victims to scams over the last five years. In this article, we’ll have a look at some of the most common credit card scams and things you can do to protect yourself.
1. Interest Rate Scams
Have you ever received a phone call or email with a message that says you have qualified for a lower rate and asking you for information? Don’t trust such emails or calls. Their only purpose is to extract personal information including your financial details all in order to scam you. While there are legitimate companies that can help you renegotiate your interest rate, they don’t usually send unsolicited messages asking the recipient to provide personal details. Such calls or requests should never be entertained, especially if they claim to have ‘inside’ connections. It is possible to lower the interest rate without hiring the services of a third party. Contact your issuer and request a reduced rate. You might have the option to transfer your balance to a card that offers a lower rate.
2. Phishing Scams
Phishing emails are quite common and can lead to identity theft. Consumers lost more than $56 billion due to phishing in 2020. These work like overcharging scams as they involve receiving a message or email that appears authentic but comes from an unreliable source. It contains bank logos, names, and other such details; however, the sender is not genuine. These emails send the recipient to a fraudulent website where they are asked to provide personal information such as their name, credit card number, and date of birth. These fraudulent sites are an exact replica of the original website. The trick is to get you to provide personal information that is sent to the scammer who can go on the web shopping using your card details. These phishing emails may come as a special ‘discount’ from your favorite store urging you to ‘buy now’. Always look at the sender’s email address and make sure it comes from a genuine address.
3. Skim Scams
Despite the adoption of EMV technology, skimming scams are still very common. In fact, there was a 10 percent increase in skimming frauds in 2017 and the number hasn’t decreased since. Scammers use a small device called a ‘skimmer’ that is installed on card readers found at public places like ATMs and gas stations. This device comes with the ability to steal information on your card when you insert or swipe it. These electronic devices can be very difficult to detect, making it hard to protect against skimming scams. Commonly found in tourist-heavy regions, skimmers cause a loss of more than $1 billion per year. Look for signs of tampering and avoid using readers where you see any device attached near the card slot. Use mobile payment providers to reduce the risk and most importantly, keep an eye on your account balances and contact your issuer if you see incorrect transactions.