We've all heard stories about identity theft that are meant to warn us. Then why do so many people think it won't happen to them?
Too often, it does happen. Credit card holders are more likely to have their information stolen than other people. Unlike in the past, when identity thieves used fake checks and forged signatures, today's thieves use credit card information to open lines of credit in their victims' names and rack up huge debts.
If you have a credit card, you can protect your identity in a number of ways. First, and most importantly, you need to keep your eyes open. Always know where your card is and be careful with who you give it to. Waiters and other servers can easily write down the information on your credit card for their own use. Remember that all you need to shop online or over the phone is the number on your card. Sometimes, it's best to pay with cash.
If it is possible, cardholders should also be able to get their statements online. Even though it seems counterintuitive, theft is less likely to happen with electronic statements on secure servers than with paper statements that are handled by several people before they get to your mailbox. When you sort through your mail, you might also forget about paper statements and throw them away carelessly, leaving them intact and easy to read for identity thieves who look through trash cans for their next victim.
If you're still not ready to go paperless, make sure to throw away all copies of your credit card statement after you've read them. Some people say to burn the papers, but all you need is a good paper shredder.
Whether you get a paper or an electronic statement, you should check it often to make sure that all the charges were made by you. You should tell your card company right away about any problems. If you're moving, let the company know ahead of time so that your credit card statements don't get sent to your new place. You should also let the company know if your card is lost or stolen so that they can stop charges from being made to your account.
Some credit cards have a small picture of the person who has the card printed on them so that they can be found. This adds a thin layer of extra protection. The photo will stop thieves from using a stolen card in person, but it won't stop them from going on an online shopping spree with the money. Even so, if this feature is available, you might as well use it.
Lastly, new card programmes like RevolutionMoney use a system of virtual PIN numbers for people who are really worried about identity theft. These cards don't have account numbers, and just by looking at them, you can't tell anything about who they belong to. They even give the card holder the option of giving additional, temporary PINs to merchants they don't know well.
Identity theft is bad, but it can be stopped. You can't just ignore the problem and hope it doesn't affect you. A friend used to joke that his low credit score was his best defence against identity theft. But he's not laughing anymore since the recent rise in subprime lending made it possible for anyone to finance anything.
