Top 5 Credit Card Frauds To Be Alert Of!

Credit card frauds have sadly become common across the globe. The problem does not lie in the fact that these frauds are increasing but, in the fact that the customers are unaware of how they occur. This awareness is required to be smarter and keep these scams at bay. For this awareness, it is essential to know the different credit card frauds that are occurring these days.

Application Identity Theft

This kind of fraud occurs when someone else applies for a credit card or credit using your name. Such a fraudster will first try to get the supporting documents in an illicit way to validate a fake application.

Luckily, the credit card issuing organization has some counteractive measures to prevent such kind of fraud. One of them is to ask for only original documents. Another one is to call the person in whose name the application is made for confirming identity.

Nevertheless, as a workaround, the fraudsters tend to counterfeit documents and give fake contact numbers as well as work or home address. Still, this can be verified against the original documents.

E-commerce Cookies Misuse

For most of us, online shopping is perhaps the most loved activity. It has become common to buy from a myriad of things, ranging right from groceries to gadgets from different shopping portals. While searching for any product on a shopping site, cookies are created to store your search details and then provide links to similar other products of your interest.

While this is useful, it also has an adverse impact if used by a fraudster. Such a person can then use the details in cookies to send you e-mails that may seem like coming from your credit card company or bank.

Well, you should never open the links given in such e-mails regardless of how authentic they may appear to you. For any new offer or doubt clarification, it is wise to go to the official website of the bank.

Call Scam

Most credit card frauds happen through a phone call. Many credit card owners have come across such fraudsters who disguise themselves as bank officials or customer service representatives. They typically proceed by asking for credit card details such as expiry date, card number, and even CVV and pin number by conveying genuine reasons.

Some of these reasons are: The card has been expired, the card is about to get updated with new features, and the card is going to give a lifetime or one-time offer. This is how the fraudsters make you fall into a trap. Then, it takes no time for them to withdraw cash from your account.

Well, the fact is that no bank or credit card company official will ask for any card or account details. Any update or offer is directly posted on the official website.

Skimming

Herein, a device takes the details from the magnetic stripe of a credit card. This device is a credit card skimmer affixed to a merchant’s terminal or ATM. These details are then used to create a fake card or trigger a Card-Not-Present (CNP) scam.

CNP Scam

This fraud occurs when an illicit person knows the card’s number and its expiry date. It happens via an e-mail or a call. The fraudster uses your card without having it physically. Such fraud is now kept at bay with the mandate of submitting the card verification code. However, if the fraudster knows your account number, it is possible to know the code too.

Conclusion

These credit card frauds are the most common ones to occur anywhere across the planet. The credit card owners just need to be careful while applying for and using these cards.

6 Features To Check Out While Buying A New Travel Credit Card

Travel credit cards are rewarding, as they give you a golden chance of grabbing free points redeemable for cash. To get more customers, credit card companies or banks provide a myriad of travel rewards such as special discounts, welcome points and loyalty points.

Well, this is beneficial for customers like you who travel a lot. You can easily accumulate points through which you can easily enjoy a variety of freebies. With so many credit cards, the challenging part is to choose the most profitable one for you as per your budget and travel plans.

To make it easier for you, here are the top 5 features to check out!

Introductory Offer

The best credit cards for travel provide a substantial welcome offer, provided you fulfill its minimum outlay requirement of making one or more purchases typically within the initial few months. Doing so will earn you a significant number of points that can bring you closer to a free hotel stay or a flight journey.

Depending on the card, you can earn up to five times per currency spent. At times, the points you earn are so high that you can grab a couple of free flights! In short, you can gain an immediate credit of thousands of points for little purchases. So, choose a card that has a good welcome offer.

Minimum Low Outlay

It is true that a travel reward credit card requires you to spend a minimum amount within a timeframe to enjoy bonuses. It is ideal to grab one such bonus via standard daily spending.

This does not mean that you should not look for cards whose minimum spending is high, as they come with sizable rewards. However, the point here is that you should start with a small spending requirement, as it is unwise to stick to several cards whose minimum spending requirement cannot be met.

Mastering the art of fulfilling the minimum spending requirement is essential. This is because if you spend more cash than normal only to grab the points, the latter is then not free. So, just spend what you usually would.

Affordable Annual Fee

It is obvious that no credit card owner will prefer paying substantial annual fees. In case of branded cards, the annual fee is somewhat high. If you travel frequently, then having such a card is fine. Fee-based cards come with a big rewards scheme for giving quick points, services and offers along with better trip protection. You are likely to save more on travel than on fees.

Zero Foreign Transaction Fees

Credit cards are preferable in foreign nations, as they give the most attractive exchange rates. However, if you are charged for doing so every time, it is unacceptable. So, look for a credit card that ensures zero foreign transaction fees.

Perks

Most travel rewards credit cards have special perks to offer. Some of the most common ones are priority flight boarding, free stay at a destination hotel or resort and free checked baggage. So, do look for such offers.

Brand Spending Bonus

Some good credit cards for travel make you earn additional points while buying from a specific shop, retailer, or brand. Such a feature gives you more points quite swiftly. Instead of getting just one point per dollar, the card should give you double or more points per dollar. At least, look for the card that gives double points for the total money spent at an outlet.

Conclusion

The best credit card for travel should be the most rewarding for you. It is ideal to have a card that has all these features.

How Using A Credit Card Can Contribute To Your Credit Score

If you do not have a credit card or have not applied for any loan, there is no credit score for you. In this case, the score in your credit report shall be -1 or No Hit indicating that it is impossible to determine one’s credit behavior. Such is the impact of a credit card on the score, as it helps in setting up a reliable credit history if used properly. Here is how it can affect your credit score:

Getting a New Credit Card

It is common to have two or more credit cards. However, whenever you request a new card, the issuer makes a hard investigation on your credit report. It is inevitable although it reduces your credit score for some time. You can recover the score by making some regular payments.

Thus, applying for several credit cards or loans and credit cards simultaneously can bring down the score. As a result, it is wise to ensure minimum credit card applications. You should take a new card only if it is truly needed.

Further, you should consider getting a new credit card as per your purpose. For example, for the purpose of shopping, apply for a card with decent cashback. If you are a traveler, look for a credit card that gives you good miles or free offers.

Deferral Credit Card Payments

The most critical factor that affects your credit score is your payment history. So, if you are like those who miss or keep delaying the card dues, you are likely to bring down your score drastically. Any payment delay you make is informed to the officials at credit bureau agencies that track your credit score. Thus, it is wise to pay all credit card dues completely each month.

Credit Utilization Ratio (CUR)

This ratio reveals the amount used beyond the available or offered credit limit. It is zero if there is no balance or you have not used the card. In case of no balance, it becomes tough to apply for a loan, as hardly anyone would accept or sanction it.

Generally, it is advised to retain a CUR of 30 to 40%. If there is a surge, it is likely to make your credit score fall. This is because the creditors perceive this surge as a credit hungry trait. So, beware!

You can consider getting a higher limit on the card that you have if you can pay the dues well. For this, you only need to request your bank or credit card issuing agency. Alternatively, you can go for a new card featuring a greater limit. No matter what you choose, never go beyond your credit limit, especially when you feel like spending more.

Terminating a Credit Card

Just as applying for a new credit card, terminating an existing or old card can affect your credit score negatively. The reason is credit history that significantly contributes to the total score. If you are about to terminate an old credit card account, it will be as good as deleting your credit history.

A closure of such an account means no access to the credit limit due to which the CUR will fall significantly. Thus, do not rush to terminate any old card. You need to act wisely. If you feel that the card is no longer required, simply store it safely or consider reducing its usage but do not terminate it. Such a wise step will not affect your score negatively.

Conclusion

Applying for your first credit card is an easy way to initiate the credit history. However, you need to use it for developing a good history.

Scroll to top