hile you no doubt have more at stake when it comes to protecting your credit rating than any large organization, credit card companies and businesses that accept cards also have a real interest in preventing credit card fraud. Because consumers are usually not liable for more than $50 of fraudulent charges on a card, fraud is a very expensive proposition for banks, card issuers, and businesses. Of course, these expenses are often passed on to consumers in the form of higher prices, so ultimately everyone pays. But card companies are using sophisticated computing technology to prevent fraud before a criminal can run up huge charges with a stolen card or account number.
		"Neural network" computing allows credit card companies to screen transactions, analyzing them for signs of fraud. The neural networks combine powerful hardware with software that detects patterns and correlations in large databases. This allows the credit card company to compare a transaction with your normal use patterns within minutes after your card is used and flag transactions that don't seem like yours. Once a charge has been identified as possible fraud, the card issuer will often block the account against future charges until it can verify the legitimacy of the charge with the cardholder. Although protecting your credit and credit rating against fraud is a real benefit to you, a block on your account can lead to frustrating surprises for you if you go on a rare vacation or unusual shopping spree with your credit card. But being aware of activity that might trigger a flag can also help you avoid such difficulties. While credit card issuers who use these systems are reticent about what exactly might lead to a charge being flagged (they don't want to teach criminals what to avoid), there are some obvious behaviors that might lead to an account being blocked. The computers look at both your individual card-use patterns and known patterns for fraud. Thus an atypical burst of activity-such as a series of purchases in a different city of foreign country on a card which has previously been used only at home-or a charge which is particularly common among thieves might cause the card company to block the card. One of these types of transactions is a late-night fill up at a gas pump. Card thieves will often test a stolen card for usability with this kind of purchase, which can be made anonymously at a pay-at-the-pump machine. If the card still works, the thief knows the victim hasn't reported the card lost or stolen yet and that the time is ripe for a spending spree. Even without a gas-pump check, a sudden flurry of activity can indicate fraud because thieves know they probably don't have long before the missing card is reported. Other triggers are the charge of an expensive item that could be resold quickly, such as a computer, with a card usually used only for small purchases, or a charge that is over the account's limit, which a thief naturally will not know. A sudden series of cash advances also warns the system that something may be amiss, as one fraud tactic is to take a stolen card from bank to bank gathering cash before the window of opportunity closes. Therefore, if you know that you will be going on a trip or making and unusually large purchase or cash withdrawal, it's a good idea to let your card issuer know in advance. A simple phone call to the credit card company can prevent the hassle and frustration of having your card refused mid-vacation or as you buy that new computer.
		ontrary to what many people believe, the Internet is actually one of the safest places to use your credit card for making purchases. It is surprisingly easy for criminals to copy a physical credit card, with about $20 of equipment from an electronics store and just a few seconds with your card. So handing your card to a waiter who carries it away for several minutes involves the risk that your card might be copied. And even without the card itself, a thief can purchase just about anything over the phone with nothing more than your name, account number and card's expiration date-all of which you reveal to the person at the other end of the line whenever you make a telephone order. Naturally, doing business with reputable enterprises minimizes this risk, as they will have carefully chosen and trained their employees, but there remains the fact that these transactions include certain inherent risks. In contrast, companies doing business over the Internet, like ConsumerInfo.Com®, make use of cutting-edge encryption software that encodes your credit card number and expiration date before it is transferred, making it almost impossible for would-be-criminals to obtain your account information. This difficulty provides a further disincentive to attempts at online credit fraud. After all, why would a thief bother with expensive computers and hacking software when hundreds of account numbers can be lifted from the unshredded paperwork in people's trashcans?
		hile it is good to know that others are working to prevent fraud, it is still important that you take steps to safeguard yourself. Regardless of the technologies being employed, you should still carry as few cards around with you as possible, shred or tear into small pieces any documents bearing credit account information (including offers of new credit cards you receive in the mail) before you throw them away, and never give out credit card information to anyone unless you can verify that they are a legitimate business. If you make purchases over the phone, for example, only do so if you initiated the call. And if you shop online, check out the company's security procedures-a legitimate internet business will explain them clearly in an easily accessible part of their web site (often the order form itself). Even when you visit local restaurants and shops, you can pay attention to the security precautions they take with your credit card (see box). If you feel they aren't careful, encourage them to change their procedures, or consider taking your business elsewhere.
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