8 Types of Credit Card Fraud to Avoid

Credit card fraud happens often, and you may have already experienced it once or twice! In 2019, there were over 270,000 reports of identity theft — and credit card fraud was the most common type and has more than doubled between 2017 and 2019.1 You can protect your identity and money by learning about different types of credit card fraud and taking the right steps to prevent it.

Identity thieves and credit card scammers are experts in the credit card fraud business. They’ve mastered the techniques and have sly skills for stealing cards, card details, identities and money. That’s why we’ve rounded up eight types of credit card fraud that you should know about. Learn about these various “business models” and get tips on how to safeguard your identity and card.

Lost and Stolen

This is the most basic type of credit card fraud — your physical card gets into the wrong hands because it was either lost or stolen. If you have multiple cards, don’t carry all of them in your wallet at once and leave the others at home in a safe spot. Linking a couple of your cards to a digital wallet can help secure them even more. As soon as you notice a card is missing, call your card company so they can cancel it immediately. Also, always cut up any cards you cancel!

Counterfeit Fraud

Did you know fraudsters can actually create a fake card in your name? It starts with skimming, which is the use of a device designed to capture card details from the magnetic strip. For example, a restaurant server takes your card and runs it through the merchant terminal. The attached skimmer collects all the info used to duplicate the card. Make sure to keep an eye on your card anytime it’s swiped and inspect a card reader to see if there’s anything suspicious.


If there’s one tip to remember, it’s do not give out your card, bank account or personal information over the phone, text or email. Scammers try to trick you by posing as a financial institution, retailer or business that you trust. You may be asked to click on a link or call a number to verify your identity and information. Never reveal sensitive details — no matter how official the message looks or sounds. Delete or hang up and call the company directly to inquire.

Card Not Present (CNP)

Once a fraudster steals your card details through phishing, for instance, they have all they need to shop online and over the phone — even if your card is still in your possession. This is why you should frequently keep an eye on your accounts. If you catch an unauthorized transaction, call your card company ASAP. Most card issuers have a zero-liability policy/fraud liability coverage, which protects you from being responsible for the fraudulent charges.

Account Takeover

In possession of your personal information like your address and birthday, a fraudster can contact your financial institution to report a lost card or request a change of address. After providing proof of your identity, they’ll request the replacement card to be sent to the fake address. Always protect your authentication info and habitually check account activity. You can also set up transaction alerts, so you’re immediately notified of any unauthorized purchases.

False Application

In this case, fraudsters will apply for a credit card using your name and stolen or fake information. Before you even realize it, they maxed out the card and ruined your credit score. The Balance offers a list of actionable items to take as soon as you discover the fraudulent card which includes: reporting the fraud to the card issuer, checking your credit reports, completing an ID Theft Affidavit, filing a police report, sending the report and affidavit to the bureaus and adding a fraud alert.2

Loyalty Fraud

Your rewards, points and miles? Thieves are after those too. Since many users don’t pay close attention to their points, there’s a chance you may not even realize they’re gone. One tactic is for the criminal to redeem those points for a gift card and they’re off without a trace. Criminals can get access by hacking your account, which is why it’s important to use a strong, unique password and change it often. Also, keep tabs on your points and miles regularly.

Card Never Received

Mail ID theft is when a criminal steals a new credit card from your mailbox and pays for fraudulent purchases using it. Thieves could also steal your mailed credit card bill and use your personal information to call you, disguised as your credit card company, to collect additional sensitive information. To help protect your mail, keep a lock on your mailbox and digitize your bills and statements. If you suspect you’ve been a victim, visit the United States Postal Inspection Service to report the crime.

It’s the little habits and nuggets of knowledge that can help protect you from fraud. Manage multiple credit cards cautiously, never hand over personal information unless you can verify that whom you’re speaking to is trustworthy, scan your accounts, transactions and credit report, use a digital wallet and go paperless with your statements.

Our Fraud Prevention Cheat Sheet can help protect you from fraud.

Get the tips and don’t get scammed!



The material presented here is for educational purposes only, and is not intended to be used as financial, investment, or legal advice.