Introduction to Credit Card Frauds
Imagine you’re sitting at your favourite café, enjoying a nice cup of chai, and scrolling through your smartphone to catch up on the latest news. Suddenly, you receive a notification from your bank – an unusual credit card transaction alert. Your world stands still as you realise “Hold on a minute, I didn’t use my card.” This is such a scary scenario and sadly is more common than one might think.
The digital landscape where convenience and connectivity are at our fingertips, is evolving constantly and quickly, and with the rise of digital transactions in India. Credit card fraud has become an unfortunate reality that poses a threat to our financial well-being. As the popularity of online transactions and digital payments soars, so does the risk of falling victim to credit card fraud. In this blog, we will take a look at some proactive measures and safety tips that you can follow to shield yourself from the clutches of fraudsters and keep your future safe.
Set Credit card transaction alerts
One of the first things you should do to protect yourself from fraud is enable transaction alerts. You can do this by logging into net banking or you can go to your branch and ask them to set up transaction alerts for your account. Pretty much every bank provides this service for free. Whenever you use your credit card to make a transaction, you receive real-time notifications via text messages or emails which allow you to gain immediate awareness of any suspicious activity. So if you receive a notification that your card was used and you’re sure that it wasn’t used or authorised by you. You can take prompt action and contact your bank to report the unauthorised transaction. Your card will be blocked and you’ll be safe.
Set limit on transactions
Another line of defence can be added by simply setting limits on your credit card transactions. This won’t outright shield you from fraud, but in case your credit card does get compromised, the damage will be limited. You can also do this through net banking or your bank’s app. In the settings where you find the options to set limits, you might also find an option to enable or disable international transactions. Unless you frequently travel abroad and use your credit card there you should have this option disabled. You can turn it on anytime you want later. The reason to have it switched off by default is to gain that extra bit of protection from international fraudsters. Setting up transaction limits also helps to control and monitor your spending. This is a good way to limit the potential damage caused by unauthorised use of your credit card.
Also Read: How Can Credit Cards Impact Personal Financial Planning?
Monitor Credit card transactions
If you regularly monitor your credit card transactions you will be able to identify any unusual patterns or unauthorised activities. These days most of us have multiple debit cards and credit cards so keeping track of every transaction through them can be a bit tedious. That is why you should make full use of your bank’s online or mobile banking services to keep a close eye on your transaction history. Have your notifications enabled and review your statements. This is crucial as it makes sure that fraudulent activities are nipped in the bud. You can easily detect and report any discrepancies you find and your bank can take the necessary steps to safeguard your financial well-being.
Never Write Down PINs
This next tip is extremely important. A lot of frauds happen because fraudsters get their hands on the PINs of credit or debit cards. This is the age of smartphones and smartwatches, and it can be tempting to store important information digitally but it’s crucial to resist this urge. Don’t make a digital note of your PIN anywhere and do not write it on a piece of paper.
There are cases where people write down their card’s PIN on a small piece of paper and put it in their wallets with their cards. Their wallet gets lost or stolen, and before they can block the cards, their money’s gone. Avoid this by simply memorising your PIN. It’s a four-digit number, just pick something that has special significance to you, is easy for you to remember, and hard for others to guess. Do not pick anything obvious like birthdays or digits of your phone number.
If someone you know who has access to that kind of information gets their hands on your cards you could be compromised. Remember that you can always change your PIN through mobile apps or by visiting an ATM. This simple step can prevent unauthorised access to your card and add an extra layer of security to your accounts.
Creating Strong Passwords
Sometimes when you’re making a payment through net banking or credit card portals you have the option to use your username and password. Setting a strong and unguessable password is a vital aspect of protecting your financial information. Don’t use easily guessable combinations like birthdays or names, and opt for a mix of uppercase and lowercase letters, numbers, and symbols. This makes your password hard to guess or brute force. Other than that, the same rules as PIN apply as discussed above – do not write them down and do not share them with anyone.
A common mistake people make is that they use the same passwords for multiple accounts. Avoid this mistake because in case, say your email data is compromised and your net banking password is the same as your email, your bank details will get exposed. Regularly update your passwords every few months to enhance your defence against potential breaches.
Role of a Financial Advisor in Credit Card Safety
Day by day fraudsters get more and more creative and devise new ways to cheat people out of their hard-earned money. In a world driven by technology and convenience, protecting yourself from credit card fraud is a shared responsibility between you and financial institutions. Professionals such as experienced financial advisors can help you stay updated on potential ways that scammers might use and recommend strategies to help you fortify your financial defences.
A key part of financial planning is security. Financial security is not only about accumulating wealth but also about protecting what you’ve earned. A financial advisor can help you get to that level of security, help you stay a step ahead of scammers, and grant you peace of mind. On top of that with a professional’s help, you can learn about the role a credit card can play in your overall financial plan and how you can use it to build a positive credit history.
Conclusion:
As personal finance technology advances and our lives get easier, an unfortunate side effect is the rise of fraudsters who are waiting for us to make a mistake. The answer though is to not live in fear but to educate oneself on ways to identify frauds and take proactive measures to prevent them. Do not share sensitive details like your credit card number, CVV, OTPs, PINs, or passwords with anyone.
If you lose your card or think that it’s been stolen, immediately contact your bank to block it. Set up transaction alerts, monitor your transactions, and seek the advice of a financial advisor for comprehensive planning, and you can significantly reduce the risk of falling victim to credit card fraud. Stay vigilant, stay informed, and empower yourself to navigate the digital world securely.
Also Read: How to Many Credit Cards are Hurting You?
