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How to Prevent Credit Card Frauds?

In this fast-developing financial world, the credit card has become one of the most convenient ways for consumers to pay for their everyday basic purchases to settle bigger values of money. Yet, how can a credit card be prevented from fraudulent activities? These days banks take an extra step to choose the platforms that offer effective fraud risk management solutions.

What is a Credit Card?

Unlike an ATM or debit card, credit cards come with added protective features for fraud prevention. To a consumer, credit cards allow the purchasing of goods and services by loan schemes that are beyond the approved credit limit. The purchase bills are sent to the credit card holder ensuring they pay at a later date for that particular month.

Choosing  a Credit Card

There are various credit cards available in the market but credit cards differ very much from debit cards. While a debit card is directly connected to a regular checking account, a credit card is charged with interest and a monthly bill after a purchase transaction issued by the company or bank. More so, they also offer cardholders to build credit. But if these cards are used irresponsibly there are chances of falling into debt. As long as consumers are aware of how they choose to utilise the card, one of the most important things to consider is whether they will be able to pay off the bank within the specified time.

Types of Credit Cards

  • Reward Cards

This type of card allows cardholders to earn points for every cash they use or spend. Consumers are also provided with bonus points, mileage points or extra discounts. Reward cards usually include an annual fee with high-interest rates and so having a good credit score is vital for long term use.

  • Money Transfer Credit Cards

Using a money transfer card can affect your credit ratings but helps with borrowing cash from the bank directly through a bank account for an affordable fee. Offering a 0% rate period, transfer cards require a strong credit score for approval.

Managing Fraud Risk

As each card issued by banks vary, it is best to know some of the main rules or conditions that prevent your new card to fall into fraudulent traps:

Avoid Disclosing Credit Card Information

Your credit card number and personal data regarding it should only be disclosed upon your initiative. In addition, it’s important to be mindful of who you speak to and disclose the details on the phone, text message or email on customer service.

Always make sure to make fresh calls and verify the one on the receiving end. Anyone requesting your credit card number by phone or email should be ignored. There are numerous instances where credit card scammers masquerade as card issuers from corporate banks and insist you share your card details.

Guard Your Passwords and Change Them Regularly

When creating passwords it’s always better to form up complicated passwords without including family names or personal digits where it’s easily recognisable. True, having an easy password to remember might seem a safer alternative but this makes it easy for fraudsters to hack into email accounts using their guesses based on the information you have provided in the passwords.

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