The holiday season tends to be a time when we spend considerably more money than usual; indeed, the average shopper with a budget intends to spend $1,115 on holiday expenses this year, according to a recent survey by Lincoln Financial Group. Unfortunately, scammers realize that we tend to spend freely this time of year, so many of them will step up their efforts to claim a share of your hard-earned money.
Wise shoppers will take the following precautions to protect themselves from the most common forms of holiday theft and fraud.
Put all your holiday purchases on one card
Every time you use a credit card, you're increasing the odds that someone will get a hold of your card information. For instance, handing a credit card to a salesperson gives them the chance to write down the number and use it or sell it, while swiping your card at a terminal exposes you to card skimmers (more on those below).
If you do all your spending on just one credit card, you'll limit the damage that fraudsters can do. In a worst-case scenario, they might manage to steal your card information and make unauthorized purchases, but at least your other credit cards (and your debit card and bank account) won't be exposed. Plus, if you're just using just one card, you can monitor it a little more closely, which will make it easier to catch any issues early on. Speaking of which...
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Turn on transaction alerts
Most credit cards will give you the option to turn on several different types of warning messages. Transaction alerts will send you an email or text message every time a purchase is made on the card in question. Turn on this alert for the card you use for your holiday shopping, and you'll be notified immediately if an unauthorized purchase takes place. Your card may also offer balance alerts that provide you with your card's total balance on a regular basis, as well as spending alerts that notify you of purchases over a certain size.
Check your credit report
Credit card companies often send out a flurry of new sign-up and balance transfer offers this time of year to help consumers scrape together a little more money for holiday spending. That means there's a higher-than-normal risk that a fraudster will intercept such an offer and use it to make purchases in your name. For example, those handy paper checks that come with many balance transfer offers make it easy for fraudsters to buy something large -- on you. All the scammer has to do is fill out the check and fake your signature, which is yet another reason why checking card statements (and turning on transaction alerts) is so important during the holidays.
Ideally, you should check your credit report both before and immediately after the holiday season so that you'll catch any fraudulent activity before too much damage is done. By law, you can get a copy of your credit report from each of the three major credit bureaus for free once a year, so one option would be to pull your report from one credit bureau before you start your holiday spending and pull a credit report from a different bureau come January.
Consider fraud alerts
If you don't plan on opening any new accounts in the immediate future, it might be best to place a fraud alert with the credit bureaus. A fraud alert warns lenders to take extra steps to confirm the identity of anyone who tries to open a new account in your name. This is a particularly good idea if you were recently exposed to a data breach, such as the Equifax hack, or were otherwise put at high risk of identity theft.
Watch out for skimmers
It's always a good idea to be on the lookout for credit card skimmers, but they're an especially big concern during the holidays. A credit card skimmer is a device that attaches to an ATM or merchant terminal and captures card information for fraudsters to use. Skimmers these days have become more sophisticated and are often invisible from the outside of the machine. Consider downloading the Skimmer Scanner app to increase your chances of spotting these devices, and watch out for any strange-looking attachments or broken security seals on ATMs and merchant terminals (though machines are unlikely to show any visible signs of tampering). And if you're paying for gas with a credit card, pay inside -- or at least use the pump nearest to the attendant.
You don't need to obsess about the threat of identity theft over the holidays, but it's wise to take these simple precautions to prevent it. That way you won't have a financial mess to untangle right at the beginning of a brand-new year.
