Fraudsters may be more likely to strike during the holiday season when consumer spending is high, so vigilance is especially important from November to January.
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Here’s how to protect your sensitive payment information and credit from abuse during the holiday season:
7 ways to protect your credit while holiday shopping
1. Rely on a small number of cards.
Instead of spreading out purchases among a multitude of cards, keep them concentrated to one or two credit cards.
“Not only will that help you keep track of how much you’ve spent, but if your online accounts are compromised, the damage will be limited to one card, rather than multiple cards,” said Laura Scherler, director of financial stability and success for United Way Worldwide.
The most lucrative rewards cards in your wallet may be a good place to focus your holiday purchases – especially cards with EMV chips. Most major brick-and-mortar retailers now process chip card payments, a technology upgrade that fights counterfeit card fraud and helps reduce the odds your sensitive payment information may be exposed in a data breach.
“We have seen a 58 percent reduction in counterfeit card fraud just this year as a result of the EMV migration, so it’s working well,” said Jason Oxman, CEO of the Electronic Transactions Association. “It provides a lot of protection for consumers shopping in stores.”
2. Keep track of paper (and digital) receipts.
After you are done shopping, take a few minutes to stash those receipts that might otherwise end up crumpled at the bottom of a purse, pocket or get accidentally thrown away. Then, periodically compare the receipts to your credit card statements and online account histories, watching for odd charges that could indicate your account has been compromised.
“When folks get their credit card information misused, it usually doesn’t show up as a $10,000 item,” said William Malik, vice president of infrastructure strategies for security company Trend Micro. “It usually shows up as a $5.13 item because hackers are automated. They are going to hit a million cards at a time.”
When many purchases are made in a short period of time, small fraudulent charges can fly under the radar. The sooner you spot fraud, the easier it will be to resolve.
“If you see a $5.13 discrepancy on your card statement, and you didn’t keep your receipts, you are going to scratch your head and think, \u2018Gee, I was in that mall for a long time. I wonder if I might have done that,’” Malik added. “So, save receipts and actually check your accounts against them.”
3. Turn on credit account activity alerts.
For a more automated defense against fraud, sign up for automatic transaction alerts that most major card issuers make available to cardholders.
“Users can adjust these notifications to only distribute when a purchase exceeds a certain amount, like $100,” said Kendal Perez, a savings expert with CouponSherpa.com.
“But, for consumers concerned about their credit safety, receiving these notifications every time they make a purchase during the holidays ensures they’re tracking their card’s use and staying on top of any questionable or fraudulent transactions.”
Another “set it and forget it” option is to share your shopping plans with card issuers.
“If you plan on doing most of your holiday shopping over a short period of time – such as over a weekend or two – call your bank/credit card to let them know that your credit card activity will be higher than normal,” Scheler said.
“If there is significant card activity outside of that time period, your card company can contact you to verify the charges.”
4. Improve account passwords and update them often.
You may not have total control over what happens with your personal and payment information once it’s in the hands of retailers, but you can help secure your accounts by using strong passwords and changing them routinely.
The standard wisdom on how to create passwords has changed. Account passwords don’t need to be overly complicated with a series of numbers, letters and symbols. Instead, use phrases that are long, personal and easy to remember.
“What’s the title of your favorite book? And what year did you first read it?” Malik suggested. “Or you could take the title of your favorite song and make that your password. It’s a big, long password that’s tough to guess.”
5. Give mobile wallets a try.
If you haven’t jumped on the mobile payment train, this holiday shopping season may be a good time to do so. Making payments using mobile wallets apps are not only convenient, but they can add more layers of payment card security when shopping in stores.
“It’s a very secure practice,” Oxman said. “Even more secure than a plastic card, because of the added protection of technologies such as biometrics and tokenization.”
6. Be stingy about signing up for email promotions and online shopping accounts.
Think twice before sharing unessential data with retailers and websites, such as your email or home address or storing your card details with an online retailer.
“I remember when Radio Shack would ask for your address every time you bought something,” Malik said. “But they didn’t need my address to sell me a battery. You don’t have to give people all the information just because they asked nicely.”
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“If you are getting something for free, the product [the retailer gets] is you,” Oxman said.
“As much as we are programmed not to read the terms and conditions of things we sign up for, it’s very important when you are giving out personal information to understand what is being done with it.”
7. Check your credit report now and later.
You may take time off work during the holidays, but identity thieves don’t. The best way to make sure your credit is safe is to check your credit reports.
“Regular credit monitoring is imperative year-round. That said, fraudsters may be more likely to strike during the holiday season when consumer spending is high, so vigilance is especially important from November to January,” said John Danaher, president of consumer interactive at TransUnion.
Consumers are entitled to one free credit report each year from each major credit bureau via AnnualCreditReport.com, or can get a free credit report and score from CreditCards.com. Monitor your statements and credit report now, while you shop, but also into the new year. Report suspicious activity right away.
“I cannot reiterate enough the importance of regularly checking your credit report for unauthorized credit inquiries that might signal fraud,” Danaher added. “One of the most important actions consumers can take to protect themselves from fraud is vigilance.”