Credit card fraud is one of the most prevalent types of financial fraud today. According to the Federal Trade Commission (FTC), there were over 214,000 reports of credit card fraud in the first half of 2024 alone. While many credit cards offer zero liability protection, meaning you won’t be held responsible for unauthorized transactions, dealing with credit card fraud can be a time-consuming hassle. It’s also costly for businesses, making it essential to take proactive steps to prevent credit card fraud.

What Is Credit Card Fraud?

Credit card fraud encompasses various fraudulent activities involving the unauthorized use of a credit card. Common types include:

• First-party fraud: Occurs when someone uses a credit card with no intention of repaying the debt, or when a cardholder claims a legitimate purchase was fraudulent.
• New account fraud: Happens when a criminal applies for a credit card using stolen personal information.
• Existing account fraud: Involves the unauthorized use of an existing credit card account.

The FTC focuses on new account and existing account fraud, both of which are considered forms of identity theft.

How Does Credit Card Fraud Happen?

Criminals use different methods to carry out credit card fraud. Some of the most common techniques include:

• Stealing physical cards: A thief may steal your card and attempt to use it before you can report it stolen.
• Card skimming: Fraudsters install skimming devices at card terminals to capture credit card details, which are then used to create fake cards.
• Phishing scams: Scammers send emails or texts pretending to be legitimate companies, tricking you into providing your credit card information.
• Account takeover: Criminals gain access to your online account, add your card to their digital wallet, or request a new card sent to an address they control.
• Using stolen card info: Fraudsters may purchase or guess stolen credit card information to make online purchases or create cloned cards.
• Identity theft: Criminals steal or buy your personal information to apply for credit cards in your name, or they create synthetic identities using a combination of real and fake information.

Credit Card Fraud Statistics

According to the FTC, credit card fraud is one of the most common types of fraud reported. Here are some recent statistics:

• 2023: There were 426,045 reports of credit card fraud, a 5% decrease from 2022.
• First half of 2024: There were 214,607 reports of credit card fraud, down 4.5% from the same period in 2023.

The data also shows that credit card fraud is most common among individuals aged 20 to 50, with the highest reports among people aged 30 to 39.

Credit Card Identity Theft by Age in Early 2024

• 19 and Under: 1,195 cases
• 20 to 29: 38,875 cases
• 30 to 39: 61,773 cases
• 40 to 49: 41,603 cases
• 50 to 59: 25,059 cases
• 60 to 69: 13,738 cases
• 70 to 79: 5,584 cases
• 80 and Over: 1,447 cases

These statistics demonstrate that credit card fraud remains a significant problem for all age groups, with certain demographics more frequently targeted.

How to Avoid Credit Card Fraud

Even though credit card fraud is common, credit cards are still considered safe because cardholders aren’t held responsible for unauthorized transactions. However, taking steps to prevent fraud can save you time and headaches. Here are several ways to protect yourself from credit card fraud:

1. Don’t share information with unsolicited contacts: Never respond to texts or emails asking for your credit card or personal information. Scammers often pretend to be from your card issuer and ask you to verify suspicious activity. If you’re concerned, contact your card issuer directly using the number on the back of your card.
2. Keep your online accounts secure: Use unique, strong passwords for your accounts—especially financial ones. Consider using a password manager and enabling two-factor authentication to provide an extra layer of security.
3. Be cautious when shopping online: Before entering your credit card details, verify that the online store is legitimate. Look for unusual prices, typos in URLs, or poor website design, which can be red flags for fake ecommerce websites.
4. Use contactless payment options: Paying with contactless methods like tapping your card or using a digital wallet can reduce the risk of card skimming at terminals.
5. Update your devices regularly: Keeping your computer and mobile devices updated with the latest security patches can help protect against malware that could steal your personal information.
6. Freeze your credit reports: Consider placing a credit freeze on your credit reports to prevent criminals from opening new accounts in your name. You can do this for free through the three major credit bureaus.

Additionally, most credit card issuers offer options to set up alerts for transactions. You can receive notifications for every purchase, transactions over a certain amount, or specific types of charges. These alerts can help you spot unauthorized activity quickly.

Monitor Your Accounts for Fraud

Regularly monitoring your credit card accounts can help you detect fraud early. If someone applies for a new credit card in your name, you may receive alerts about new hard inquiries or credit accounts. The quicker you identify fraud, the easier it is to stop criminals from using your card.

The Bottom Line

So, how common is credit card fraud? The answer is: very common. Despite the decreasing number of reports in recent years, credit card fraud remains a major concern for consumers. Protecting your credit card information and staying vigilant can help prevent fraud. By following best practices and monitoring your accounts, you can minimize the risk and ensure you catch fraudulent activity before it causes significant harm.

If you ever need expert assistance or guidance on your credit journey, don’t hesitate to reach out to the Nerds! Additionally, stay updated with the latest tips and information by following us on Facebook, Instagram and TikTok!