How Do Credit Card Scams Work

How Do Credit Card Scams Work?

Since their inception, credit cards have provided consumers, businesses, and thieves with opportunities to benefit financially. If you are not careful enough, you could be a victim of a credit card scam that could affect your financial health and credit score. But how does this happen?

Simple Vs Sophisticated Credit Card Scams

Some credit card scams are simple, while others are sophisticated and hard to catch onto. The goal is for scammers to get your credit card information so they can use it for financial gain. Some scams are basic and do not use any technology, while others are technologically sophisticated.

Phishing for Credit Card Information

One method scammers use to get credit card information is phishing. This involves posing as a credit card or other financial company to lure unsuspecting victims into giving up information. This could be through an online form where the user enters their details with the false pretense that the website needs to verify their information.

It is possible to spot phishing attempts before they ensnare you but it requires knowing the signs.

Detecting Phishing Emails

Phishing scams can come by way of emails that look like they are from popular internet companies, such as Amazon or Netflix. When glancing quickly, most users will think these emails are from a real business. The key is being able to spot the details that reveal it is a scam email.

Massive Data Breaches

Server data breaches (big or small) are another way hackers can get credit card information. No major company is safe from one of these attacks, and their stored customer data is always at risk of being stolen.


Hackers can use keyloggers to spy on unsuspecting victims and obtain their credit card details when they make a purchase online. The way to stop this is to have antivirus and antimalware software installed on your system along with a firewall.

For more information, see our complete Mega Antivirus Software Review.

NFC Skimming From Credit Cards

Criminals can “skim” the NFC contactless chip by altering the payment machine that customers insert their credit cards into. These can be altered machines, or additional attachments to the machines, or specially designed
machines that look legitimate. This system uses short-range radio communication to transfer information from your credit card or smartphone to a payment terminal. Small devices can charge purchases to individuals whenever they pass close by with their credit card, and they will not know it has happened until later. The key is always monitoring your financial accounts for false charges.

No PIN’s or Signatures Required For NFC payments

NFC payments are contactless and do not require PINs or signatures to make purchases online at major shopping sites such as Amazon. This makes them very easy for thieves to take advantage of as the purchase can be fast and require little direct user interaction.

Credit Card Spending Limits

The credit card spending limit set by the user or their lending institution will stop a thief from abusing their account too much. This can be something the user can adjust to protect their credit card account by setting it to a lower amount.

Spending Limit Before Requiring A PIN

Many cards will only allow a certain amount of payments before asking for a user’s PIN. This will limit the total spending a thief can do before being stopped.

Laundering Money Through Flipping Products

Cyberthieves might choose to flip products instead of putting money directly into their own accounts, making it harder to track any stolen funds. They make a string of large purchases that are easy to resell online and pocket the funds afterward through alternative seller accounts on the dark web.

Gift cards are prime items for cyberthieves to launder funds because they are very easy to sell. Marking them at a discount below their purchase price makes them attractive to buyers.

Credit Cards And The Dark Web

Stolen credit card numbers often end up on the dark web where other criminals can buy them, and sometimes for very little cost. In fact, they can buy large quantities of credit card numbers quickly and create havoc for many people, potentially including you. The dark web is a place that is harder for law enforcement to track and find criminals, so this is a place thieves can do business without getting caught.

Ways to Stay Protected From Credit Card Fraud

Keeping your credit card secure from thieves is not very difficult if you know how to do it.

#1. Be Careful About Sharing Your Credit Card Details

It is important to not share your credit card details with anyone unless it is necessary. Sometimes you have to tell a person or digital agent over the phone your credit card number, but be very cautious about doing so otherwise.

#2. Spot Major Data Breaches

If you read or watch the news regularly you can spot data breaches that happen at major companies holding consumer data. If a company’s service you use is hacked, make sure to contact your financial institution soon afterward so as to stop any false charges that might occur.

Some banks, however, may not respond well to customers trying to remove fraudulent charges from their accounts. So, it is best to alert them as fast as possible and even put a freeze on your credit cards.

#3. Get a Special RFID Wallet

Today, you can get wallets that block RFID data from being stolen from your credit card while it is inside. These prevent any passing scanners from picking up credit card RFID signals. So, the only time your card will be read will be when you actually take it out of your wallet and use it to purchase something.

#4. Be Wary of Credit Card Payment Machines

Scammers can alter a store credit card scanning machine or attach their own to it to read and record the card information. This is known as credit card skimming and is hard to detect. These can be present at the following locations:

  • Convenience stores
  • Gas Stations
  • Coffee shops
  • ATMs

To be safe, only get cash from ATMs at your bank’s locations, pay directly at the counter for any purchase, and never leave your credit card anywhere other than in your wallet.

#5. Monitor Your Financial Statements

Keep an eye on your financial statements including credit card statements, credit reports, and bank statements. Credit reports are often free to obtain and help you spot any anomalies that may have occurred. If you think a data breach, card theft, or major hack has happened, review your financial statements as fast as possible afterward.

To Recap…

Credit cards are plastic goldmines for scammers and can quickly cause a headache for anyone who has theirs stolen. So, make sure to keep your cards safe and be cautious when using them.