How to Reduce the Odds of Credit Card Fraud

January 9th, 2009

Yesterday I ordered a pizza with Papa Johns and my credit card was denied. “This can’t be good” was the first thing I thought. After quickly checking my online statement, I found out that between December 31st – January 8th, there had been about $5,000 of unauthorized charges to my credit card – ‘yay!’ For the record, most of these charges were done in Cape Town, South Africa, a place where Jose mentioned that 2 colleagues had the same problem a while back. In other words, watch your freakin’ credit card while in SA, never let anyone take it where you cannot see it.

Even though I have credit card fraud insurance with HSBC, I will have to take the fall for 10% of the total charges, which obviously sucks. I had heard about stories in which credit cards were cloned, but I never thought I’d be a victim. So I’m thinking about ways for this to never happen again, or at least, that if it does happen again, it is not as bad as this one. Here are some ideas:

Get a credit card that offers 100% insurance if your credit card has a high limit.
Regardless of the card, always have some type of insurance
Check your credit card statements every day. Takes 5 minutes, can save you a lot.
Completely wipe out the 3 digit security code that every card has, make it so that it is not readable (but make sure you write it down somewhere)
Talk with your bank and have something fire off an e-mail alert when there are charges greater than $500 (thanks Maria)
Try to never lose sight of your credit card (something really to accomplish in Costa Rican bars and restaurants)

Any others you’d like to share?

[UPDATE] I wrote to some friends I met in Cape Town warning them about this issue and here is their reply:

crazy stuff is happening..my mastercard data has been copied and used as well. before i was able to block it I lost round about 1.100 euro between 30.12.2008 and 03.01.2009. in germany things run a little different.. I don’t have insurance but it seems like mastercard will do a “chargeback” after they received the receipts from the different shops… (what they basicly do is make sure it wasn’t me) luckily i can prove the abuse because I had left SA on the 19.12 already….
by the way, same thing happened to a friend of mine in cape town I was sharing a room with..

so at least you’re not alone