How to Protect Yourself Against Credit Card Theft

Safeguard your wallet and your identity with these tips.

Ever feel paranoid about leaving your credit card behind the bar, or giving your account number to an online retailer you’ve never shopped with before? You should. Federal prosecutors recently announced that hackers stole more than 130 million credit and debit card numbers and the accompanying account details from several big companies over the past two years.

The scheme, which the feds call the biggest such case in U.S. history, serves as a stark reminder that it pays to protect your personal information.

Unfortunately, as the case illustrates, the recession has made credit and debit card theft all the more common. According to Javelin Strategy & Research, the number of identity theft victims rose 22% last year, to 9.9 million.

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But there’s good news in Javelin’s research, too. Most theft isn’t high-tech. Instead, it’s the result of common crimes like a snatched wallet.

Simple Precautions

You can guard against becoming a victim by taking a few simple precautions. Most important, be careful to whom you give your credit-card information. That may sound obvious but, particularly now that scammers are targeting consumers with emails asking for card details, you should be on alert. If you receive an email you think is a scam, don’t respond. Forward it to, which will store it in the Federal Trade Commission’s database used by law enforcement agencies.

Another safeguard: Don’t reveal your card number over the phone unless you’re certain you’re speaking to a reputable retailer or a trustworthy financial institution. And when you use your card in a store or a restaurant, watch closely to make sure the employee doesn’t “skim” it. Some skimming devices look like cell phones.

Before you shop or pay bills from your home computer, encrypt your home WiFi by turning on the WiFi Protected Access (WPA) in your router. And spring for anti-spyware software (it’s free at to prevent someone from tracking your keystrokes. For more tips, contact the National Cyber Security Alliance (

Lower-Tech Tactics

You could carry your cards in a small pouch that’s separate from your wallet. When you use your card at an ATM, shield the keypad with your hand. And buy a decent cross-cut or confetti shredder, such as the Fellowes Powershred DS-2 (less than $100), to destroy mailed offers and documents with sensitive personal information.

Finally, review your credit card and bank statements each month. If you see something unfamiliar, call the issuer right away to see whether you can get more information about it -- or to dispute the charge. “It’s the best ten minutes you’ll spend that day,” says Adam Levin, chairman of Identity Theft 911. If it turns out your card has been stolen, tell your card company immediately. You’ll be liable for, at most, $50 worth of charges, although Visa and MasterCard waive even that. Bill Hardekopf, chief executive of, a Web site that ranks credit cards, takes theft prevention a step further. Instead of signing the back of his credit cards, he writes “check ID.” That way, if the card is stolen, thieves won’t be able to use it in a store. Of course, when Hardekopf uses his cards, store clerks have to verify his ID. But the approach makes him feel safe.

If despite your best efforts you think someone used your card fraudulently, don’t panic. Contact the Identity Theft Resource Center (, a nonprofit group that will help you resolve the situation for free.

Associate Editor, Kiplinger's Personal Finance