The biggest drawback of using a credit card is the risk of fraud and identity theft. Unlike debt (which is incurred consciously) credit card fraud can happen at any time, and frequently with no warning to the card holder until it’s too late. And the consequences range from the merely annoying, such as having to call and cancel your stolen card, to the downright catastrophic, such as identity theft.

Credit Card Fraud Tip 1 : Use Virtual Credit Cards
Leaving your card at home is all well and good to prevent in-person fraud, but what about shopping online? By using virtual credit cards ( which have a different number than your regular credit card and expire after one use ) you can remove the one thing from the equation that attracts criminals: a viable card to steal. Thieves who intercept virtual credit card numbers will soon find that they no longer work, which will send them on their way toward the next victim-in-waiting. Best of all, most banks and credit card companies ( including PayPal ) now offer virtual cards for little or no cost.

Credit Card Fraud Tip 2 : Shred Your Mail
The surest way to prevent criminals from getting their hands on such documents as bank statements or utility bills is to shred them before they leave your home. Do not, as many foolishly do, simply toss those papers in the trash and figure that no one will really stoop so low as to empty your garbage cans to find them. Professional identity thieves can and will do just that, because they know from experience that it pays off in spades. Don’t take that chance. Instead, invest $40 in a small paper shredder and make it a rule of the household that nothing hits the trash can without being shredded first.

Credit Card Fraud Tip 3 : Do Not Submit Credit Card Numbers to Bank Emails
As a general rule, most banks and credit card companies will never request your account numbers via e-mail. Such requests will occur over the phone or, more likely, in person. No matter how official, credible, or authoritative an e-mail or website appears to be, if it is asking for sensitive information–especially in connection with a “ routine security check ”–you can safely assume that you are being scammed and back away. In fact, most banks (on their real websites) explicitly state that they will never approach you for this information in any such manner.

Credit Card Fraud Tip 4 : Review Your Billing Statements Periodically
There is one way to detect early warning signs of credit card fraud: periodically reviewing your billing statements. While most people instinctively toss their statements in the trash ( because, after all, they know what they charged ), this is in fact the only way to detect whether fraudulent charges have been made. A simple, 5 minute review of your statement will make crystal clear whether the card has been used improperly, and it can mean the difference between canceling your card while there’s time to limit the damage or being completely unaware until disaster befalls you.