Identity Theft and How it Can Affect your Credit Card Deals

Identity theft is the largest growing and most common financial crime committed today and this is mostly a function of people not really caring about it or taking a few easy steps to protect themselves from it.

If a person gets a hold of your name, date of birth, credit card number and social security number, it is actually possible for them to take over your finances in their entirety. Most banks will verify a name, a date of birth, a credit card number, a social security number and an address when you do telephone banking with them. If they are at all suspicious (and most of them rarely ever are), they might go so far as to ask for your mother's maiden name.

If another person can give them all this information, then that person is you as far as the person at the other end of the telephone line is concerned. They can open new accounts, take out new lines of credit and even charge things to you. A person with your information can single-handedly ruin your credit rating, thereby screwing up all your future credit card deals and transactions.

Why Get Worried About Identity Theft?

There are many reasons to get worried about identity theft:

• A person can single-handedly turn a good credit rating into an extremely poor credit history in a very short period of time. This can in turn hamper your ability to get the best credit card deals (or even good credit card deals for that matter), as well as putting you at a disadvantage every time you look for new credit card deals.
• If you own a small business or are planning to start one, consider that a poor credit rating can result in a complete lack of business credit card deals, which in turn can sink your business before it even begins.
• Remember the movie "The Net", starring Sandra Bullock? While not very likely, that kind of identity theft can happen. It is illegal, but many people continue to do it, simply because some people make it so easy to do.

Credit card fraud is a form of identity theft and credit card fraud protection should be of paramount importance to every single person.

How Does Identity Theft Affect You?

There are a variety of ways that identity theft can affect you and it depends on the type of identity theft that has taken place:

• If you find that a password to one of your accounts has changed and you did nothing to change it yourself, you might be a victim of identity theft.
• If you find a missing amount of money from your cheque or savings account, you might be a victim of identity theft.
• If you find that one of your cheques is missing and later on find that a cheque of yours has bounced elsewhere, you might be a victim of identity theft.
• If you find charges on your credit card that you don't remember making, you might be a victim of identity theft.

These are just four of many situations that can arise as a result of identity theft. In general, if you find something out of the ordinary or different about any aspect of your life that you don't remember causing, you might be a victim of identity theft.

Once you've been the victim, bad things can start to happen. In the case of bounced cheques and stolen credit cards, it's not really the money that's important. Banks and credit card companies are required to protect their customers against theft with insurance, but they can do nothing to prevent the damage those events could cause to your credit. Future credit card deals could be severely affected by this and until you fill out the reams of paperwork and wait the months (maybe even years) it takes to sort this out, you can forget about getting any of the best credit card deals (or even good credit card deals for that matter) because nobody will want to give them to you.

A Measure of Protection

Credit card fraud protection as well as protection from other kinds of identity theft is a lot easier than most people think. There are some simple as well as some more complicated steps a person can take to protect themselves, but they're all well worth it for the peace of mind that they provide. These steps include:

1. Taking care with your documents. Be very careful with how you throw out documents like old credit card bills. The best thing to do is to shred any document that contains your personal information once you're done with it. Storing past credit card bills, while helpful in maintaining records, might not be a good idea for some people. If you do keep them, make sure they are in a safe place.

2. Use passwords and pin codes that aren't obvious. Maiden names, birthdates and telephone numbers are awful passwords, because they are way too easy to guess. Something like an old student number, which only you would know and that is old enough to be very difficult to obtain is a good choice and has the dual benefit of both being easy for you to remember and difficult for other people to guess.

3. Take care with who you give your information out to. Especially do not give your social security number to anyone or put it on any form unless it is a specific requirement of the form (preferably a legal requirement).

4. Request a copy of your credit report on a regular basis (every 3-6 months) and check it for errors.

Parting Words

New credit card deals for individuals and business credit card deals for small business owner's hinge on their credit. They need to have a good credit rating to get the maximum value out of their cards (low fees, low interest rates, good rewards). People with good credit that are careless about their personal information could become the victims of identity theft and end up with poor credit when all is said and done.

Always remember that an ounce of prevention is worth a pound of cure and that taking the time now to prevent identity theft will save you large amounts of time that you might otherwise spend dealing with its repercussions.

Share Opinion: