A credit card can make your life easier in many ways. You can purchase expensive items on EMI basis, be prepared for emergencies that require a lot of money on a short notice, and even shop online to enjoy huge discounts/cashback offers, etc. However, the benefits come with their share of risks.
The Risks: Credit Card Scams
Frauds related to credit cards aren’t uncommon. Tricksters use all kinds of methods such as skimming, triangulation, etc. to dupe their victims and cause financial damage. However, there are various steps that you can take to prevent yourself from getting trapped in a scam:
1. Protect your card details
Never reveal your card details especially the PIN and password over phone or email. A lot of fraudsters try to trick their victims by telling them that their credit card details have been stolen and they need to know their PIN so that they can block the card. The victim, naturally panicked, shares the PIN with them which they then use to make unauthorized transactions.
Remember – no employee from your credit card provider will ever ask your card’s PIN or password. So, if you receive a call or email that wants the same, you should alert the bank immediately.
2. Look into your monthly statements thoroughly
Just like it’s a good idea to monitor your credit report frequently to avoid CIBIL score damage and the risk of making it to the loan defaulter list, it’s also advised that you check your monthly card statements to identify unfamiliar transactions. This can help you to prevent a major financial loss if you inform your card issuer and block the card before it’s too late.
3. Be selective where you swipe your card
There is a popular credit card scam in which a shop owner or helper uses a skimming device with a POS machine. So, when you swipe your card when making a payment, the device records its details which are then used later to create a duplicate card. The culprit can use this card to rob you of your funds later.
To prevent falling victim to such kind of fraud, avoiding using your card at small stores or shops which you are not familiar with. Only use the card at well-known and reputed stores, malls, etc. Banks also recommend that you replace your card after you come back from a vacation (assuming you used your card for shopping at various places) to minimize the risks.
4. Be cautious when shopping online
It’s highly recommended that you install a premium and reliable anti-virus program on your smartphone as well as laptop/computer. This is to keep viruses/keyloggers, etc. that can steal your banking information at bay. Also, you should never buy something from an unrecognized or unfamiliar email link or social media post. Instead, do online shopping only from the well-known e-commerce websites such as Flipkart, Amazon, etc.
5. Replace your credit card with a chip-based counterpart
To improve the security of credit cards, many banks have launched more secure cards that come with an embedded chip. This chip adds another layer of protection when you use your card for making transactions. This is because the POS machines and ATMs verify a card by its chip before approving the transaction. Even if someone tries to clone the card, they can’t copy the data stored on the chip which makes these cards extremely safe.
6. Take mobile alerts seriously
The mobile-alert feature of credit and debit cards is extremely useful. These alerts keep you up to date with the activities of your card. Thus, you should pay attention to every text message you receive from your card issuer. In case, you get a message that a certain payment is made with your credit card without your authorization, then you can alert your bank and perhaps even reverse the transaction, protect your name from loan defaulter list.
Although cashless transactions are becoming popular in India today, it’s important to stay cautious no matter what digital payment method you choose. As far as credit cards are concerned, the tips above should greatly help. So, stay alert and use your cards responsibly.