How to avoid credit scams

Credit card scams have been used to rob the unsuspecting since the advent of credit cards, but with a bit of caution and some preparation, you can protect yourself from most of the scams employed by thieves. Even though your bank will never hold you responsible for a transaction that you did not make, you still have to notice that your money has been stolen before you can report this to the bank. Make sure that you keep your receipts and compare them, line by line, to the charges made on your card each month. Oftentimes, scammers will attempt to make a single charge to a credit card in the hopes that you will not notice.

There are many methods scammers use to get credit card numbers to begin with, such as copying down numbers from hotels and restaurants, but they employ more devious means as well. One common tactic is to take your information from a company you are already doing business with online. These scams involve pop-up boxes that offer a "free" item with purchase, but if you read the fine print, you are actually allowing this scammer to charge your card each month.

A variation on this scam is for a company to purchase your information from a business you purchased from, and to send you mail with "free offers," sometimes even in the name of the original company, or a "check" which may be cashed. However, the fine print here specifies that by cashing the check, you are allowing a monthly charge on your credit card. With both of these scams, the charges may appear in the name of the company you originally bought something from, so only a careful review of your monthly statement would reveal the trick.

The best way to make sure that you do not fall victim to a credit card scam is by reviewing your bill each month, no matter how large of a task this may seem. This is often not a simple task, but remember that with credit cards, the only money you lose is the money that you don't realize has been stolen. Keeping your receipts and arranging them chronologically can help you to streamline this process every month. If you engage in a large number of online transactions, you may want to look into issuers like Citicards or Discover Card, which allow you to create one-time credit card numbers for purchasing online.

-Seth Berger