stack of credit cards

Cyber crimes and identity theft in recent years have become more sophisticated to the point that cyber criminals have opened up online stores that offer up the credit card and account information from unsuspecting victims.

With savvy technology that can potentially read and swipe your card’s personal information even while stored in your wallet, your credit card company can detect suspicious activity is being generated on your credit card. While these companies don’t give specifics on how they go about detecting the fraud, instead they look for warning signs and spending habits.

Here are a few ways your bank or credit card company can detect suspicious activity:

1. Shopping in less desirable neighborhoods

If there’s a shopping spree that takes place in areas that are deemed fraud prone, it raises red flags from your credit card company. If there are purchases in large amounts, the bank will most likely put a freeze on the account.

2. Testing the card

Usually, before the thief goes out and spends frivolously, they will test out the card to see if it works by purchasing an item for a small amount or filling up at the gas station. If the same small amount is charged consecutively, the bank may stop payment, as it is a possible fraudulent purchase.

If you usually buy gas in the same area of your city, but you fill up in another part of town, this can trigger an alert with the bank.

3. Your location

If your card or number is stolen and a purchase is made in Europe while another is simultaneously made in California, but you live in New York, that is a definite alert that there is fraudulent activity going on.

One thing to keep in mind is that even though you make an honest purchase if there is suspicious activity taking place, your card will most likely be declined.

4. Unusual spending habits

Constant activity in a short period of time can raise a red flag to bank and credit card companies. The bank can see your purchases and knows your spending habits, and if it’s an amount out of the ordinary, you may get a call from your bank or credit card issuer questioning your purchase.

If you’re suddenly buying an expensive handbag that’s worth $1,000, but your spending habits with your card is usually below $200, that can cause fraud detection. There may be a freeze put on the account if there are large amounts of purchases or cash withdrawn from ATMs.

It’s important to always pay close attention to and keep track of all purchases made with your card. Checking your monthly statement isn’t enough. Be vigilant about your purchases, and if you are concerned about your credit card company or bank issuing a freeze on your account (if you are, for example, going on vacation overseas), call them ahead of time and alert them of your situation.

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  • Shelleson

    If I have confirmed that the payer of money to me is really a lottery winner, should I still suspect fraud and/or a scam of some kind?

  • leftkat

    This happened to me–twice in the same evening! I used two different cards at an ATM, which I rarely use, since I don’t care for them much. But I wanted some cash that evening, and was, strangely enough, right in my own neighborhood. One card was declined, since I hadn’t ever used that machine, and they sent me a message to call Customer Service. The other, the folks simply wanted to make sure it was really me, and asked me to verify online. That was my second-oldest card. It’s good to know they have your back. Better to be safe than sorry!

    • ClaireMBT

      Hi LeftKat, because of all of the data breaches that have happened in the last several years, credit card companies have really beefed up their security. If you sign up for text alerts through your credit card issuer, it can be less of a hassle for you, in these situations. You’ll receive a text message, and all you need to do is respond. Credit card issuers are all different, but I know for Barclaycard, all I needed to do was respond to the text and I was good to go ahead with my purchase.