Let’s first understand what is a credit card? A credit card is basically a type of card that allows you to borrow money from financial institutions such as banks. In simple words, it allows you to take the same loans from the financial institutions quickly which you have to repay within the billing cycle that is usually within 50 days. These 50 days is your interest-free period. Bank allows you to spend a limited amount of money with a certain period which is known as your credit limit. Your credit limit is usually decided by the bank based on your income level and credit score. There are many advantages of a credit card if you use it wisely. A credit card can help you to build a good credit score, pay immediately as well as you can earn rewards. But, to enjoy these benefits of a credit card you have to pay the bill of credit card fully on monthly basis. That’s how you can avoid paying interest. As I have already mentioned credit cards usually give you 50 interest-free days. Make sure you pay all your bills within that period. Otherwise, you have to pay a huge interest rate on your spending along with the late fee. But you can easily avoid such a situation by spending money within your budget. Alongside, these advantages credit cards also run the risk of being targeted for fraud. Here are some common types of credit card scams and fraud.
- Point of sale fraud
In this type of fraud, your data is hacked by using a small device by connecting it with Point-of-sale devices in payment junctions. The device records your data while you swipe your card for the transaction. Further, these data are shared by merchants with malicious actors. To avoid such fraud, you must check the suspicious device properly before making any transaction. Make sure to cover the keypad with the other hand while entering the pin for the transaction.
Phishing is one of the most common scams of credit cards. Phishing is generally an attempt to acquire your sensitive information such as your username, password, card number, PIN, etc by masquerading as a trustworthy source. Hackers usually contact you through emails or phone to acquire such information. They ask you to provide them this information for some seemingly important information. Doing these can instantly put you at risk of being defrauded. Please avoid such emails and phone calls. Bank or any other financial institution never asks for such personal information over the phone or email.
- Cyber-attack or carding
Carding is a kind of fraud in which a hacker steals important information of credit cards such as credit card numbers, CVV, etc. They make sure it works, and then utilize them to buy prepaid gift cards. The thief may trade the prepaid cards or utilize them to purchase other goods which, in turn, can be resold for cash.
You must treat your credit card as a valuable item or cash in your pocket and always careful while using it to avoid such fraud. To know more about credit card-related information please visit our website.