Stay a Step Ahead of Credit and Debit Card Fraud

Fraudsters are getting smarter, but you can stay a step ahead. Criminals use sophisticated tools to steal credit and debit card information, leaving victims with the hassle of replacing cards, resetting automatic payments, and disputing fraudulent charges. Fortunately, you can take practical steps to reduce your risk and minimize inconvenience if fraud does occur.

Credit Card vs. Debit Card Quick Tip:

Use credit cards for purchases and keep your debit card primarily for ATM withdrawals. Credit cards generally offer stronger protection than debit cards:

• Legal Protections: Credit cardholders have liability capped at $50 under federal law — and many issuers offer zero-liability protection.
• Cash Flow Protection: Fraudulent charges don’t directly drain your bank account, so you maintain access to your cash while disputes are resolved.
• Ease of Disputes: Disputing a charge is typically easier and faster, and your credit card account remains usable while you wait for a replacement card.

Preventing Old-Fashioned Theft

• RFID Protection: Carry contactless cards in an RFID-blocking wallet or sleeve to prevent wireless skimming.
• Inspect Card Readers: Look for loose or tampered card slots at gas pumps, ATMs, or checkout terminals.
• Keep Cards in Sight: Whenever possible, watch your card during transactions.
• Cover Your PIN: Shield the keypad from cameras and prying eyes when entering a PIN.

Digital Safeguards Quick Tip:

Turn on two-factor authentication and receive instant purchase alerts from your card issuer.

• Strong, Unique Passwords: Use a password manager to keep track of secure passwords.
• Two-Factor Authentication: Require a text, app code, or biometric confirmation before completing online purchases.
• Private Connections: Avoid entering payment information over public
  Wi-Fi networks.
• Virtual Card Numbers: Many issuers let you generate temporary card numbers for online purchases.
• Stay Alert for Phishing: Don’t click on suspicious links or respond to requests for personal information via email or text.

Proactive Credit Monitoring & Freezing

• Credit Monitoring: Ask to receive security alerts when there are changes to your credit report, such as new
  account openings.
• Fraud Alerts: Tell lenders to verify your identity before approving new credit applications.
• Credit Freeze: Block all new credit inquiries until you lift the freeze. This is free and highly effective at preventing fraudulent account openings.

Insurance & Liability Protections

• Zero-Liability Policies: Visa, Mastercard, American Express, and Discover all offer strong protections, so check your cardholder agreement.
• Identity Theft Insurance: Covers certain costs related to restoring your identity, such as lost wages or legal fees.
• Homeowners/Renters Riders: Many policies offer inexpensive riders for identity theft coverage.
• Employer Benefits: Some workplaces offer group identity-protection plans,
  so review what’s available to you.

Emerging Security Technologies

• Biometric Authentication: Some cards and apps use fingerprint or facial recognition for added security.
• Digital Wallets: Apple Pay, Google Wallet, and others use tokenization to protect your real card number.
• Real-Time Alerts: Get immediate notifications for every transaction.
• Geolocation Matching: Some issuers verify your card use based on your phone’s location.

A Quick-Response Plan

If you suspect fraud:

• Report Immediately: Call the number on the back of your card.
• Request a Replacement: Ask for expedited shipping.
• Update Automatic Payments: Keep a secure list so you can quickly transfer recurring charges.
• Monitor Accounts: Review statements and credit reports for several months afterward.

Card fraud and identity theft are unlikely to go away, but you can make yourself a difficult target. By combining physical precautions, digital security habits, proactive monitoring, and insurance protection, you can reduce both your risk and the inconvenience if fraud does occur.

The opinions voiced here are for general information only and are not intended to provide specific advice or recommendations for any individual. Grace S. Yung, CFP®, is a Certified Financial Planner™ practitioner and the CEO & Founder of Midtown Financial Group, LLC, in Houston. Since 1994, she has helped LGBTQ individuals, domestic partners, and families plan and manage their finances with care and expertise. She is a Wealth Advisor offering securities and advisory services through LPL Financial, a Registered Investment Advisor. Member FINRA/SIPC. Grace can be reached at grace.yung@lpl.com.For more information, visit www.midtownfg.com or www.midtownfg.com/lgbtqplus.10.htm.