How to Avoid Credit Card Theft

How to Avoid Credit Card Theft

Most people I know use their credit card or debit card for every purchase of any kind. Some do this for the airline miles, some for the convenience, and some for both. Most of those people have encountered credit card theft and had their credit card account compromised yet do not seem too concerned about it. It has never happened to me…until this year. I logged into my credit card account to view charges from a trip, and I was surprised to find three charges totaling about $3500 within a 10 day period that were not mine! I immediately called the credit card company, and they cancelled that card and overnighted me another card with a different number. But, now the crooks have my information. Can they easily do it again? I learned a couple of months later that Holiday Inn’s computers got hacked and credit card information was stolen. I had stayed in a Holiday Inn in Houston the month before.


There are solutions to minimize the possibility of this happening. One solution is to use “virtual numbers” when purchasing online. CitiBank offers virtual numbers on their cards. You simply run their program when you need to make a purchase. The program generates a “virtual” credit card with a unique number that is linked to your credit card. The number expires in 10 minutes, so the information on a vendor’s computer (that you bought something online from) is worthless even if it gets hacked.

Obviously, you have to use a credit card for purchases online, but another solution is to use cash for purchases at a physical store. Using cash has another benefit in that it is a way to define the amount you spend. Determine how much you want to spend per month, or per year, then determine how much that amount would be per week. Take that amount each week on the same day of the week. Then, do not spend more than the cash you get for that week. This is a real easy way to not only limit your exposure to credit card thieves, but it is a much easier way to control your spending on discretionary purchases. I have proven many times through clients that you spend more when you use credit cards versus cash.

If you have experienced or think that you might be the victim of credit card theft, consider reading the following article from the Consumer Financial Protection Bureau:

Four steps you can take if you think your credit or debit card data was hacked