Happy Holidays everyone. It is that time of year when millions if not billions of transactions are processed online. Through paypal, google checkout, and credit card purchases for gifts and services. Here are a few tips for protecting yourself from credit card fraud. The first being my favorite.

Be Creative.

I choose netspend.com as my vendor for a preloaded credit card and I will tell you why. In 5 years I have never had a charge i could not justify. Why? Well, not only is it just a good card to use; convenient I go to the currency exchange and manually add money to the card. It is separated from all of my other household finances. I only use this card for online purchases. I only load what i need for that specific transaction. This also helps me save. If i want to buy that flashy item on tigerdirect.com i have to leave my house go down to the currency exchange and load the card up. This means, I really want the item and know that it will be leaving my finances.

Choose your vendors Carefully.

Choose vendors who do not falsify their BBB logos. There are a lot of companies these days that are “buying” the BBB seal. Or even stealing the seal from another website. Propping up a domain name with the seal and then no one is the wiser. The BBB should start cracking down on these types of websites including trying to get them shut down for false advertising. That’s a story for another day. Choose vendors you know about, your friends know about. If you dont know the vendor find a community to ask about ratings. Do not rely on directories. Directories show only one side of the story the commision side. The person setting up the directory is getting paid to endorse the companies in the directory they usually do not investigation or due delligience. In fact the affiliate system has been setup so corruptly that when there is a negative comment the affiliate gets kicked out of the program. You will see that change next year.

Report any suspicious activity IMMEDIATELY

Do I dare repeat this: Report any suspicious activity IMMEDIATELY. During the holidays keep a tight eye on your online bank account. Your bank Send you text alerts, have online banking notices ? If they do not you are using a bank that will not help you keep track of fraud activity very well on your card. Text alerts from chase, paypal, and netspend have helped me keep track of my vendor payments and finances for over 5 years.

Only keep what you need in your account.

I know to some this is a no brainer, but to others it is not. Why do you need $5,000 in a credit card on a regular basis that you never use ? For banking I move that to savings and make sure that it can never come out of savings without my explicit permission. Pay attention to whatever bills you use the method of payment for. You may have other automatic charges and fees coming out of that form of payment. No one wants to start the New Year with overdraft fees.

Communicate with your partner.

There are a lot of times when two people are using the credit card to make online purchases. You should get together and discuss your plans. How much can we spend, how much will each of us spend. What vendors and websites will we use. Make a list and check it twice. In case a charge comes through you don’t understand communicate the charge to your partner. There have been many instances when a partner has called me to file a chargeback to be reminded by their partner that the charge is legitimate.

If you can learn to keep your finances in order during the holidays you will be able to keep these lessons for the new year. This will help you get on track and pay attention to what is going on.

What If I am a victim of credit card fraud ?

My family member once told me “Someone from Florida is running my credit card multiple times what do I do ?” my response “GET OFF THE PHONE WITH ME CALL YOUR BANK RIGHT NOW.” Now of course we both knew this was fraud. In other cases you should call the vendor first. It is in the best interests of the vendor (and FASTER) for them to resolve the issue before issuing services bought with the stolen information. In the web hosting industry a stolen credit card is used to order a dedicated server. The server is configured and setup by the hosting company. The culprit gets into the server loads up his script, sends mass amounts of affiliate ads, spam, emails about viagra and off they go to his stolen mailing list.

By reporting the stolen credit card to the hosting company when it shows up online, or by text message you are very simply preventing spam. There are other reasons to buy hosting with a stolen credit card that is just the most popular scenario I have seen.

Other Methods to protect yourself

To good to be true ? Might be. Use a lot of common sense. Use websites with SSL’s. Paypal payments and google checkout use their own SSL encryption. Keep your credit card signed and in your personal space, not out of site out of mind unless its locked away.

How does my company prevent fraud charges ?

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