22 ways to foil credit card thieves

By Liz Pulliam Weston

In some ways, credit card fraud isn't the problem it's often made out to be.

Visa says fraud accounts for about 5 cents of every $100 spent on its credit cards, an all-time low and less than half the rate of 10 years ago. Add to that the fact that the major credit card companies have "zero liability" policies, which means the vast majority of consumers who are victims don't wind up paying a dime out of their own pockets.

Why, then, should you worry?

Well, for one, credit card fraud is a hassle. You often need to have your account closed and a new one opened, which can leave you without a card for a week or more. That's inconvenient, and it can mess up any automatic payments charged to that card.

That's if all goes well. Sometimes card issuers balk at removing charges or closing a bogus account.

Robert Allen of Simi Valley, Calif., fought with Capital One for seven months before the credit card company finally removed a disputed charge from an Internet retailer. (The retailer kept insisting it had sent the digital camera Allen ordered, but nothing ever arrived.) Allen said Capital One also closed his account and issued him a new card, which he worried might hurt him in other lenders' eyes.

"That was my oldest account at seven years," said Allen. Closing the account "makes my credit history look younger than it is."

Occasionally these disputes can escalate to the point where they show up as a late payment, charge-off or collection on your credit report. That can really trash your credit score, which is the three-digit number lenders use to help them gauge your credit-worthiness.

So, better safe than sorry. Fortunately there's plenty you can do to reduce the odds of becoming a victim.

Guard your card online

Beware of "phishing" e-mails. These are made to look as if they're coming from your bank or credit card issuer and usually urge you to take "immediate action" so that your card isn't deactivated. The link in the e-mail takes you to a criminal's Web site, where you're encouraged to input your credit card account number and other personal financial details. If you get an e-mail purporting to be from your card issuer, use the toll-free number on your card to call and ask what's up.

Be cautious shopping with unknown Web sites. A quick trip to a site like Bizrate.com or the Better Business Bureau online could help you evaluate Web sites and save you money. Also make sure you have multiple ways to contact the merchant, including a phone number, fax number, street address (not just a post office box) and e-mail address.

Make sure the transaction is secure. Don't enter your card number unless the little padlock is showing on the lower part of your browser, and the Web site address starts with "https" rather than just "http."

Don't let Web sites "store" your cards. The encryption technology used for transactions -- the information zipping back and forth between your computer and the merchant's -- may well be better than the security used to protect information stored in the merchant's databases. Besides, a big database of credit card numbers is a juicy target for hackers.

Guard your card offline

This is really basic, but: Don't forget your card. You might be rushed, or distracted by your kids, or involved in an interesting little chat with the clerk. Whatever. Keep an eye on your card and make sure it goes back in your wallet. I typically leave my wallet on the counter or restaurant table, with my hand on top of it, until the card goes back in. This can be a little awkward sometimes, but it helps remind me not to leave the store without my plastic. The one time I forgot is the time, of course, someone swiped my card.

Shield your card. Think how many people these days carry around camera phones -- and think how easy it would be to snap a picture of your card if it were left in plain view.

Don't give your number out to solicitors. This includes telemarketers who contact you by phone to offer you a "great deal" on magazine subscriptions, vacations or any other purchase. If you ever get anything, you're likely to pay a lot more for it than agreed, and some of these scamsters fight tooth and nail against your attempts to have the charges removed.

Consider carrying fewer cards. Reduce your exposure by limiting the number of cards a thief could potentially steal.

Continued: Watch your statements

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