Having a credit card unexpectedly declined can be frustrating and embarrassing. Often when this happens, the card has become restricted by the card issuer, usually temporarily. This restriction suspends your account, freezing your ability to make purchases.
If your Capital One card is restricted, you should first contact the bank to find out why. Depending on the reason, you may be able to use your card again in a matter of minutes.
Here’s what to know if your Capital One card has been suspended.
Stop fraud in its tracks
With a NerdWallet account, you can see all of your credit card activity in one place and easily access your credit report to spot any red flags quickly.
Why is your Capital One card suspended?
If your credit card gets declined and you aren’t sure why, start by calling Capital One at the number on the back of your card.
The primary reasons why your card may have been suspended include:
New card: If you’ve recently opened the account, or just received a new card in the mail, you may have forgotten to activate the card. It’s a simple fix — call the number on your card and follow the steps to activate it.
Fraud alert: Card issuers use algorithms to identify trends in your spending habits. You might receive a fraud alert if the system sees a spending irregularity, such as a big purchase, using your card in a new location or buying something from a foreign website. Fraud alerts are generally easy to clear and often can be done in real-time via text message or the card’s app. If your card is new or you’ve recently received a replacement card, you may need to take it slow with charges, at least at first. Rapid spending on a newly issued card can look like irresponsible credit management or fraud and lead to a restriction on your account.
Expired card: Be sure to check your card’s expiration date. It’s easy to overlook, and if your card is expired, transactions won’t get processed. Contact your issuer for a new card, and if you need a replacement fast, see if it has an option to expedite the new card.
Late payment(s): If you’ve missed one or multiple payments, your card issuer may suspend your ability to make new purchases until your account is brought up to date. Contact your issuer to see what exactly you owe and what it will require to clear the suspension.
Exceeding your credit limit:Your card may get declined if you attempt a charge beyond your credit limit. If you need more credit temporarily, you may be able to opt-in to over-limit purchases with Capital One. There’s no fee (though other issuers may charge a fee), and it will be up to the bank’s discretion whether to permit additional charges. If it declines your request, you’ll have to pay down the card’s balance to regain access to your existing credit line.
How to deal with a suspended credit card
If your Capital One card is suspended for a fraud alert, you may be able to clear the restriction by replying to an automatic verification text message or email sent by Capital One.
If your account is restricted due to another reason, you’ll likely have to call Capital One to figure out what the issue is. Be sure to ask why your account was restricted and what steps are required to clear the suspension. You may also want to ask Capital One what you can do to avoid future restrictions.
Will a suspended credit card impact your credit score?
Your credit score isn’t directly impacted by a suspended card, but the underlying cause of the suspension may adversely affect your credit score. A fraud alert won’t hurt your score. However, if you miss a payment or have a high credit utilization ratio, your credit score may be negatively impacted.
How can you avoid a credit card suspension?
Responsible credit management will help you appear as a lower risk to Capital One (or any card issuer). This is the easiest way to avoid a credit card restriction.
But things happen. If late payments are a problem, schedule an auto-payment to at least cover the minimum required amount each month to prevent your account from becoming delinquent. If you’re perpetually running up against your credit limit while otherwise making on-time payments, request a credit line increase to have more flexibility with your available credit.
If you know you’ll be traveling or making a large purchase, preemptively contacting Capital One with your plans can be a good way to avoid a potentially frustrating fraud alert and card suspension.
Inside: Are you looking to maximize your rewards and credit card hacks? This guide will teach you the most effective methods for using your hacking, signing up for bonus rewards, and making efficient card purchases.
Credit card use extends beyond just making purchases. Savvy credit card users understand that with the right set of hacks and optimal usage, there’s a world of rewards that are ripe for the picking.
Money saved can be money earned, and this simple philosophy forms the cornerstone of these 25 credit card hacks you’ll be learning about today.
Why do credit card hacks matter? Well, I just received a $700 check for credit card rewards. That is enough to pay for a weekend trip away.
What are Credit Card Hacks?
Credit card hacks are creative strategies employed by credit card users to maximize the benefits and rewards offered by their credit cards while also potentially saving more money.
This trend has become more popular in recent years due to the rise in premium travel and cashback cards that offer lucrative ongoing rewards programs. Users who learn about these hacks can save you money on travel or just put cold hard cash back in your wallet.
With strategic approaches, these hacks provide an avenue to optimize rewards and navigate the financial landscape more effectively.
Proven Credit Card Hacks to Maximize Rewards
Tip #1 – Utilize sign-up bonuses
One of the most attractive features of credit cards is the sign-up bonuses they offer, which are essentially rewards that cardholders can earn after meeting a certain spending threshold within a specified timeframe. The bonuses can range from hundreds to even thousands of points, miles, or cash – favorably impacting your rewards balance.
To illustrate, if you take the Chase Sapphire Preferred® credit card, both partners in a household can get up to 50,000 extra points each as part of the sign-up bonus.
Bonus tip: Stagger your applications, so once one person gets the bonus after meeting the spending requirement, the other person can then apply and achieve the next round of bonuses.
Tip #2 – Increase credit limit
The principle behind this is simply buffering your “credit utilization ratio”, which is how much of your total available credit you are utilizing.
To illustrate how a credit limit increase will work, let’s consider an example: with a credit limit of $10,000 and a credit usage of $3,000, your utilization ratio stands at 30%. But once your credit limit increases to $15,000 with the same credit usage, your utilization ratio drops to 20% – which is a noticeable improvement.
Remember, when requesting a credit limit increase, some card issuers might execute a hard inquiry on your credit report, which could temporarily decrease your score. Hence, you should try to find out beforehand whether your issuer is likely to perform a hard or soft credit pull. Soft inquiries won’t affect your credit score, making them the preferable approach.
Tip #3 – Master balance transfers
A balance transfer, executed proficiently, can be an effective way to handle significant credit card debt. By focusing on reducing the cost of debt through lower interest rates, balance transfer can accelerate your debt repayment process while saving you considerable money over time.
This is what one of my clients did and the date when the 0% interest ended was very motivating to pay off their debt.
This process entails the shuffling of debt from one card (usually one with a high interest rate) to another card—preferably with a 0% promotional APR offer. With this interest-free period, you can focus on repaying the principal balance, hence clearing your debt faster.
As a finance expert, make sure balance transfers are only beneficial if you’re mindful of the terms, like how long your 0% rate will last and what fees are involved in the transfer to the new card.
Tip #4 – Purchase prepaid cards with credit
Need a way to spend a certain dollar amount by a certain deadline? Then, look at purchasing prepaid cards with a credit card as a strategy to earn extra rewards points. This method entails buying prepaid cards or gift cards using your credit card, and later using these prepaid cards to cover those expenses you typically will use.
In other cases, customers have reported that their credit card companies have clawed back rewards points that were initially given for gift card purchases. Double check their terms and conditions, many issuers, including American Express, explicitly exclude such transactions from earning rewards. 1
Tip #5 – Harnessing the 15/3 Methodology
The 15/3 Methodology is a credit card hack that intends to optimize your credit utilization ratio—one of the significant factors that impact your credit score.
Here’s how it works: You pay off a majority of your card’s balance 15 days before your statement date, and then pay off the remaining balance three days before the statement date. By doing this, you create the illusion of a lower balance, which can positively impact your credit score.
There is still a debate about whether or not this strategy improves your credit card score. Paying your bill on time will definitely improve your score.
Tip #6 – Strategies to earn additional rewards through third-party programs
An often overlooked but highly effective credit card hack is utilizing third-party apps and websites that offer additional rewards when you shop at participating retailers and restaurants. These rewards are additional to the cash back, miles, or points awarded by your credit card.
One such app is Dosh, a cashback app. By linking your credit card to your Dosh account, you can earn up to 10% cash back from participating retailers on top of the rewards earned from your credit card. Similarly, apps like Drop and Bumped give users points for every dollar spent, and these points can be redeemed for gift cards.
Furthermore, many airlines and hotels participate in dining rewards programs where you’ll earn extra rewards at select restaurants. Airlines like United, Southwest, Delta, and hospitality giant companies like Marriott and Hilton actively participate in such programs.
Tip #7 – Earn a credit card sign-up bonus then canceling the card right away
Also known as credit card flipping or churning, the tactic of earning a credit card sign-up bonus and then canceling the card right away has been employed by some savvy credit card users to maximize rewards.
However, this practice isn’t as easy or beneficial as it appears. While it sounds like an accessible system to generate easy money, it comes with several potential pitfalls that could make it a risky move.
Firstly, numerous card issuers have, over the years, implemented stricter rules to deter this practice. Chase, for instance, has the 5/24 rule indicating you can have only five new credit cards within the last 24 months. 2
Repeatedly opening and closing the same card can result in a declined application or rescinded bonus and hurt your credit score-perceived as credit misbehavior by the issuer.
It can also be viewed as unethical and potentially lead to you being barred from opening accounts with that issuer in the future.
Churning can negatively affect your ability to get approved for future credit cards and loans because lenders may think you’re a risky borrower.”
Tip #8 – Develop a multi-card system
This method aims to cover all your spending by using different cards that offer elevated rewards for certain purchase categories.
For instance, we have one card that pays an unlimited flat rate of 2% on all purchases. Then, another rewards card offering increased category rewards, with travel and gas. Then a there card that rotates through various categories each quarter.
Diversifying your spending amongst several credit cards can help you to earn the maximum possible rewards. However, endowing yourself with several credit cards is not for everyone as it requires careful financial management. In some cases, the potential of overspending can outweigh the benefits.
Tip #9 – Transfer points between multiple cards
Transferring points between cards (provided they are from the same issuer) is another useful strategy whereby you can redeem them at their maximum possible value.
The goal is to make your spending work for you and maximize the rewards you can earn from daily expenses. However, people should employ this strategy responsibly and ensure they’re not overspending just to earn rewards.
In such a strategy, points on traditional cashback cards can be transferred to airline and hotel partners when you also have a transferable points card like the Sapphire Reserve or Sapphire Preferred. So, not only are you earning cashback on your purchases, but you’re also accumulating lucrative points that can be redeemed for travel.
Tip #10 – Don’t use cash
In the world of credit card rewards, cash is no longer king. Whenever feasible, you should consider using your credit cards instead of cash or debit to pay for everyday purchases. This allows you to earn rewards on purchases you’re making anyway.
The best way to implement this is for you to bills with their credit cards instead of cash or debit and set this up on autopay. This serves a dual purpose of potentially earning rewards on these payments whilst also conveying a positive message to the banks about your money management skills, leading to possible credit score improvements.
However, this method works best when your spending doesn’t increase as a result. Only use your credit card for expenses that you’d normally pay in cash and for which you already have the money set aside to pay.
Tip #11: Time your purchasing
Being strategic about when you make your credit card purchases can help you wring out some extra benefits.
One way to optimize your earning potential and maintain a healthy credit score is to plan your large purchases around your credit card’s billing cycle. Making your most significant purchases immediately after your statement date ensures that you have the longest possible repayment period, effectively offering you a short-term, interest-free loan.
Furthermore, if your issuer has a rewards cut-off at the end of a calendar year, you can make larger purchases ahead of time to push yourself into a higher rewards bracket.
Tip #12 – Make Micropayments
Rather than making one full payment, consider making multiple payments over the billing cycle, commonly referred to as ‘micropayments.’ This helps keep your running balance low and, in turn, your credit utilization ratio – the percentage of your available credit limit you’re using – also low, positively impacting your credit score.
Plus it helps to keep your checking account at a more accurate level.
Tip #13: Have your spouse apply for the same credit card
Known informally as the “two-player mode” amongst credit card hacking enthusiasts, having your spouse or partner apply for the same credit card can be an effective strategy to earn double the sign-up bonus. This approach is based on the idea that instead of just adding your spouse or partner as an authorized user to your card, they should apply separately.
For instance, if a card like the Chase Sapphire Preferred® offers a 50,000 points bonus on sign-up, both partners can potentially earn up to 100,000 points collectively, essentially doubling the bonus.
But remember, this hack should be used strategically – you should stagger your card applications and ensure each of you fulfills the spending criteria to qualify for the bonus.
Tip #14 – Importance of prompt payment
Quite possibly the hack with the most significant impact on both your credit score and your pocket, prompt payment of your credit card bill cannot be overstated.
Making on-time payments can drastically improve your credit score since your payment history is the most heavily-weighted factor that credit scoring models consider.
Plus paying your balance in full each month can help you avoid interest charges and penalties, effectively saving you money in the long run.
Tip #15 – Know What Rewards you Want
Rewards such as travel miles, discounts at partnered retailers, cashback, or access to premium experiences like airport lounges or concert tickets are available, depending on your card.
By understanding and leveraging these varied rewards, you can get the most excellent value out of your credit card expenses.
Cautionary Advice on Credit Card Hacks
While credit card hacks can undoubtedly offer substantial benefits when done right, pitfalls can ensue if one isn’t careful.
Pitfall #1 – Overspending
For starters, these hacks can inadvertently lead to overspending or unnecessary purchases. Be wary of making purchases you don’t need or can’t afford in an attempt to earn more rewards or meet the spend necessary for a sign-up bonus.
Consequently, the pursuit of credit card rewards could also lead to accumulated debt if you’re not diligent about paying off your balance in full each month. The interest that you need to pay on balances carried over can easily eat up the value of any rewards earned.
Pitfall #2 – Impact on your Credit Score
Applying for multiple cards can lead to hard inquiries on your credit report, which can temporarily lower your credit score. Similarly, canceling cards after acquiring the sign-up bonus could harm your credit utilization ratio and your length of credit history, both key factors in your credit score calculation.
Additionally, irresponsible habits like ‘credit card churning’ and ‘paying for everything with credit’ may risk your relationship with card issuers. Some companies might close accounts or even ban individuals from opening new ones if they’re perceived as abusing the system.
While some of the top-tier reward and travel credit cards often come with hefty annual fees, not all of them are worth paying. This is especially true when a card’s annual fees outstrip the value of the rewards earned.
Before you sign up for a credit card with an annual fee, it’s advised to read the fine print and estimate what you can earn from it. You should evaluate whether the perks, bonuses, rewards, and credits offered offset the annual fee cost.
Personally, I don’t use any cards that have an annual fee.
Pitfall #4 – Paying interest
Credit card interest can significantly impact your overall financial health if you’re not careful. The money invested toward paying it off could be better used elsewhere – for saving, investing, or spending on your needs and desires. Hence, one of the best “credit card hacks” out there is to simply stop paying interest.
You want to focus on debt free living.
Pitfall #5 – Avoiding counterproductive habits like “balance surfing”
Balance surfing is a strategy where you continually move credit card debt from one card with an ending 0% APR promotion to another card with a new 0% APR offer. While this approach can potentially delay interest payments, it can become a dangerous cycle if you find yourself simply transferring debt instead of reducing it.
Meanwhile, the total debt remains the same. Without a consistent debt repayment strategy, this method can lead to an endless cycle of balance surfing.
What are some of the best credit card rewards and hacks for 2024?
As we venture into the new year, some credit card reward strategies remain timeless while others evolve in response to new credit card offers and updated reward programs. In 2024, here are some of the best credit card hacks worth considering:
Take Advantage of Updated Card Offers: Credit card issuers frequently update their card offers and rewards programs. Ensure you stay updated on these changes to maximize your card benefits.
Focus on Cards with Flexible Reward Categories: Some cards, like the Bank of America® Customized Cash Rewards credit card, allow you to choose your highest cash-back category (like online shopping, dining, or grocery stores). These flexible category cards can be more advantageous as you can adapt them to your spending habits.
Leverage Rotating Categories: Cards like the Chase Freedom Flex℠ and Discover it® Cash Back offer 5% cash back on up to $1,500 in purchases in various categories that rotate each quarter, once you activate. Plan your spending in advance to leverage these rotating categories optimally.
Remain Alert on Loyalty Program Partnerships: Many credit cards and airlines have partnerships with other brands. This can mean increased rewards when shopping with those brands, so always watch for new partnerships or promotions.
Revisiting Annual Fees: If your credit card perks no longer justify its annual fee due to changes in lifestyle or spending habits, consider downgrading to a no-fee card from the same issuer. This way, you can save on annual fees without closing your account which could potentially harm your credit score.
Diversify Your Rewards: While it may be tempting to concentrate all your spending on a single card, diversifying your rewards can make you earn more. Consider employing a multi-card system to maximize rewards across different spending categories.
Your credit card should be a tool to enhance your financial flexibility, not a burden that leads to financial stress.
Frequently Asked Questions (FAQs)
Deciding whether to focus on paying off a single card or distributing payments over several cards can seem complicated, but there are a couple of methodologies to strategize your payoff.
The Debt Avalanche method suggests focusing on the card with the highest interest rate first. Once you’ve paid this card off in its entirety, you then move on to the card with the next highest interest rate. This can potentially save you more money in the long term as it targets high-interest debt first.
Alternatively, the Debt Snowball method, proposed by financial guru Dave Ramsey, recommends paying off the card with the smallest balance first, then moving on to the card with the second-smallest balance. While you may not save as much money in interest compared to the debt avalanche method, the psychological motivation of paying off a credit card balance entirely may be more important for maintaining consistent repayment.
Either method requires you to make minimum payments promptly on all cards to avoid late fees and possible credit score damage.
Getting credit card points without spending any additional money may seem like wishful thinking, but there are certain strategies that you can employ to achieve this. Strategically managing your credit cards can turn your everyday spending into reward points, miles, or cash back.
Referral Bonuses: Many credit card companies offer referral bonuses to their existing cardholders who refer friends or family members. If the person you referred gets approved for the card, you can earn bonus points.
Cardholder Perks: Credit card companies often run promotions offering bonus points for certain activities. These can range from enrolling in paperless billing, adding authorized users to your account, or completing an online financial education course. Check with your card issuer to view any current promotions.
Shopping Portals: Many credit card issuers, and even airline and hotel rewards programs, have their own online shopping portals where you can earn additional bonus points for every dollar spent. If you were already planning on making an online purchase, consider making it through these portals to earn extra rewards.
Sign-up Bonuses: Some cards offer sizeable sign-up bonuses for new cardholders who meet a required minimum spend within the first few months. Although this technically requires spending money, it doesn’t require spending more money if you use your card for purchases you were already planning to make.
While implementing certain credit card strategies can potentially earn you higher rewards or save money, they can also unintentionally harm your credit score if not executed responsibly.
Several factors can contribute to this potential downfall:
Opening and Closing Accounts: A high frequency of card applications can lead to multiple hard inquiries on your credit report, which might lower your score in the short term. Closing credit cards, especially older ones, can affect both your credit utilization ratio and the age of your credit history, two significant factors in your credit score calculation.
Carrying a Balance: Maintaining a high credit utilization ratio—i.e., carrying a large balance relative to your credit limit—can negatively impact your credit score.
Late Payments: If these deadlines are not strictly adhered to, they could result in late payments, which can seriously harm your credit score.
Excessive Spending: Some tactics lead to unnecessary spending to earn more reward points or meet an initial spend required for a sign-up bonus. Not only can this increase your credit utilization ratio and potentially lower your credit score, it can lead to debt if these balances are not paid off in time.
While both rewards cards and travel rewards cards offer perks to their users in return for spending, the primary difference lies in the kind of rewards they offer and their target user base.
A Rewards Card generally offers cash back, points, or miles for every dollar spent, redeemable in a variety of ways. This is the type of card I prefer. For example, you may redeem your accumulated rewards as cash back into your account, use them to purchase products or services, or exchange them for gift cards. The flexibility of rewards makes these cards are suitable for people with varied spending habits and prefer a variety of redemption options.
A Travel Rewards Card, on the other hand, is designed specifically for frequent travelers. These cards earn you points or miles on specific travel-related expenses, like booking flights or hotel stays. The redeemed rewards are typically used towards further travel-related expenses like airfare, hotel stays, or car rentals. Travel Rewards Cards often offer additional travel-centric perks like free checked bags, priority boarding, airport lounge access, and more.
Consider your spending habits, lifestyle, travel frequency, and preference in terms of reward redemption.
Protecting yourself from credit card fraud is an important aspect of managing your credit card usage effectively.
Monitor Your Accounts Regularly: Keep a thorough watch on your credit card statements for any unauthorized or suspicious charges. Report them to your credit card issuer as soon as possible.
Use Secure Networks: When making online purchases, only shop on secure websites (look for “https” in the web address), and avoid using public Wi-Fi networks for transactions.
Keep Your Personal Information Safe: It’s important to dispose of old credit card statements properly, and avoid giving out credit card information over the phone unless you initiated the call and you trust the recipient.
Protect Your PIN and Password: Don’t share these with anyone, and avoid using easily guessable combinations like birth dates or the last four digits of your social security number.
Enable Account Alerts: Most banks now offer optional security alerts that can be sent via text message or email whenever a charge above a certain amount gets made to your account.
Protect Your Computer and Phone: Make sure your devices are equipped with up-to-date antivirus software and that your phone is locked with a secure password or fingerprint identification.
In case you become a victim of credit card fraud, know the steps to protect yourself – report it to your bank or credit card company immediately, file a report with the Federal Trade Commission, and report it to the three major credit bureaus, requesting them to put a fraud alert or a credit freeze on your account.
Also remember, credit cards don’t have routing numbers.
Making the Most of Credit Card Hacking
When used wisely, credit card hacks and reward strategies can play a significant role in stretching your budget and rewarding your spending. These secrets of savvy credit card use — from aligning your card to your spending habits, making the most of sign-up bonuses and reward categories, to understanding the ins and outs of your credit card’s rewards structure — can help maximize your potential rewards and save money.
Personally, we use all of our credit card rewards to pay for our travel expenses.
However, it’s paramount to remember that these tips and tactics should not encourage unnecessary spending or carrying a balance. Only spend within your means, ensure you pay off your balances each month to avoid interest charges and remember to safeguard your credit score by handling credit card applications and closures cautiously.
Ultimately, credit card hacks and rewards should fit within your overall financial plan and goals, adding value to your everyday spending habits and rewarding you for well-managed financial practices.
Remember your goal is to reach your FI number.
Source
Reddit. “American Express Clawing Back Points Earned From Gift Card Purchases.” https://www.reddit.com/r/AmexPlatinum/comments/14hywaq/american_express_clawing_back_points_earned_from/. Accessed January 19, 2024.
CNN. “What is the Chase 5/24 rule?” https://www.cnn.com/cnn-underscored/money/chase-5-24-rule#:~:text=The%205%2F24%20rule%20is,your%20approval%20odds%20with%20Chase. Accessed January 19, 2024.
Know someone else that needs this, too? Then, please share!!
Did the post resonate with you?
More importantly, did I answer the questions you have about this topic? Let me know in the comments if I can help in some other way!
Your comments are not just welcomed; they’re an integral part of our community. Let’s continue the conversation and explore how these ideas align with your journey towards Money Bliss.
It’s no secret that identity theft has been an issue for consumers. In 2022, the Federal Trade Commission (FTC) received 1.1 million identity theft reports, and a similar number of complaints are expected in 2023. The financial toll of online fraud, which includes identity theft, can be substantial. The FTC estimates that it cost Americans $8.8 billion in 2022, with median losses around $650.
One tool that can help detect issues early on is credit monitoring. This service tracks your accounts and alerts you to any changes or suspicious activity, giving you time to start the process of undoing any damage that’s been done.
If you were involved in a data breach, you may receive credit monitoring at no cost. Otherwise, you can pay a nominal fee for the coverage — usually around $10 to $30 a month — or do most of the legwork yourself for free.
Why Is It Important to Monitor Your Credit?
Your credit history can have an impact on your ability to make big financial decisions, like purchasing a home or buying a new (or new-to-you) car.
If you have a spotless report, you could get better interest rates on new loans. On the other hand, if your score is what’s considered poor, you could be denied access to certain financial products altogether.
Even if you’re diligent about abiding by best credit practices, if someone has unauthorized use of your information, they can quickly sink your hard-earned credit score. That’s when credit monitoring comes in handy. If you see an alert corresponding to a change you didn’t make, you’ll know something’s up — and you can move quickly to repair any issues that might impact your creditworthiness.
Generally speaking, it’s a good idea to check your credit reports at least once a year. If you’re making a major purchase, consider monitor your credit for at least three months beforehand to ensure everything is in order. 💡 Quick Tip: Your credit score updates every 30-45 days. Free credit monitoring can help you learn about your score’s normal ups and downs — and when a dip is cause for concern.
Pros vs Cons of Credit Monitoring Services
Credit monitoring can be a useful tool, but there are some drawbacks you’ll want to consider. Here are pros and cons of credit monitoring services.
Pros of Credit Monitoring Services
Many credit monitoring services come with extra features that might help justify their cost. Common examples include:
• Alerts when there are changes to your personal information, significant balance changes, account closures, or hard inquiries
• Access to credit reports and scores from one or more of the three major credit bureaus
• Dark web scans, which checks if your personal information has been compromised
• Identity theft insurance, which can cover any costs you may incur as you’re dealing with identity theft
• Identity recovery services, which can be useful as you repair any damage from identity theft
Cons of Credit Monitoring Service
Even the best credit monitoring service has its limits. Here are some potential drawbacks to consider:
• Cost of a subscription
• Can’t provide 100% protection from all fraud or identity theft
• Can’t fix inaccuracies on your credit report (you’ll need to handle that)
• Coverage may not include monitoring from all three major credit bureaus: Experian, TransUnion, and Equifax
• You may not be alerted if someone uses your name to collect a tax refund or claim benefits from Medicare, Medicaid, Social Security, or unemployment insurance
How to Monitor Credit for Free
There are times when paying for a credit monitoring service makes sense. For example, you want more robust identity monitoring, prefer a program that monitors reports from the credit bureaus, or need help resolving disputes. It may also be a good move if you suspect your information has been exposed.
But it’s possible to do the job yourself (and avoid paying a subscription fee). Here’s how:
Request a Free Credit Report
By law, you’re entitled to a free credit report every 12 months from each of the three credit bureaus. Visit annualcreditreport.com to get started. While you can ask for the reports at any time, spacing out your requests every few months allows you to keep an eye on your accounts throughout the year.
Find Out If You’re Already Getting Coverage
Some accounts include some level of complimentary credit monitoring, so it’s worth a call to your bank or credit card company to find out if you qualify.
Put a Freeze on Your Credit Reports
There are instances when freezing your credit report might be a good move, such as when you believe your data has been breached or if your Social Security number or other sensitive information was stolen or made public.
A credit freeze allows only a limited number of entities to view your credit reports. This means the credit bureaus can’t provide your personal amount to new lenders, credit card companies, landlords, or hiring managers. While this freezes the renting, hiring, and lending process, it also prevents thieves from stealing your identity and opening a new account in your name.
There’s no charge to freeze or unfreeze your credit, and your credit score won’t be affected.
Request a Fraud Alert
If you think you may be the victim of fraud or identity theft, you may want to consider placing a fraud alert on your credit report. Once a fraud alert is placed, you’ll be asked to provide your phone number, which creditors will use to verify your identity whenever an application for credit is made.
There’s no charge to make the request with the credit bureaus, and the alert is active for one year. It has no impact on your credit score. 💡 Quick Tip: What is credit monitoring good for? For one, maintaining a high credit score can translate to lower interest rates on loans and credit card offers with more perks.
The Takeaway
Credit monitoring services can act like a watchdog over your accounts, flagging suspicious activity or changes so you can move quickly to correct inaccuracies or do damage control. You can take a DIY approach to keeping track of your accounts, which can include requesting a free credit report every year from the three credit bureaus. But if you’ve been the victim of identity theft or fraud — or need more robust monitoring — you may want to consider paying for a credit monitoring service.
Take control of your finances with SoFi. With our financial insights and credit score monitoring tools, you can view all of your accounts in one convenient dashboard. From there, you can see your various balances, spending breakdowns, and credit score. Plus you can easily set up budgets and discover valuable financial insights—all at no cost.
SoFi helps you stay on top of your finances.
SoFi Relay offers users the ability to connect both SoFi accounts and external accounts using Plaid, Inc.’s service. When you use the service to connect an account, you authorize SoFi to obtain account information from any external accounts as set forth in SoFi’s Terms of Use. Based on your consent SoFi will also automatically provide some financial data received from the credit bureau for your visibility, without the need of you connecting additional accounts. SoFi assumes no responsibility for the timeliness, accuracy, deletion, non-delivery or failure to store any user data, loss of user data, communications, or personalization settings. You shall confirm the accuracy of Plaid data through sources independent of SoFi. The credit score is a VantageScore® based on TransUnion® (the “Processing Agent”) data.
Non affiliation: SoFi isn’t affiliated with any of the companies highlighted in this article.
Third-Party Brand Mentions: No brands, products, or companies mentioned are affiliated with SoFi, nor do they endorse or sponsor this article. Third-party trademarks referenced herein are property of their respective owners.
Disclaimer: Many factors affect your credit scores and the interest rates you may receive. SoFi is not a Credit Repair Organization as defined under federal or state law, including the Credit Repair Organizations Act. SoFi does not provide “credit repair” services or advice or assistance regarding “rebuilding” or “improving” your credit record, credit history, or credit rating. For details, see the FTC’s website .
Financial Tips & Strategies: The tips provided on this website are of a general nature and do not take into account your specific objectives, financial situation, and needs. You should always consider their appropriateness given your own circumstances.
Of course, there’s a risk in handing over sensitive data. Identity theft is on the rise — the Federal Trade Commission received more than 1.1 million reports of it in 2022 alone. And the total number of data breaches has more than tripled, according to a 2022 report from Verizon.
The good news is, there are steps you can take to help protect your personal information. Some of these you’ll only need to do once, others are a habit that you’ll get the hang of with time.
Let’s take a closer look.
1. Use Strong Passwords
One of the most basic ways to protect yourself online is to use a unique password for each of your accounts — email, social media, mobile banking, you name it. Aim for passwords that are simple for you to remember but difficult for others to guess.
To create a strong password, keep the following tips in mind:
• Use a combination of upper- and lower-case letters, symbols, and numbers.
• Longer is usually better — aim for a password that’s at least six characters long.
• Never use personal information like your name, birthday, or email address.
• Random passwords are usually difficult for hackers to crack. Use a password generator if you need help.
💡 Quick Tip: Make money easy. Enjoy the convenience of managing bills, deposits, and transfers from one online bank account with SoFi.
2. Turn On Two-Factor Authentication
Take advantage of two-factor authentication (2FA) when possible. 2FA involves using one authentication method plus your username and password. Examples of 2FA include sending a numerical code to your phone or email, using fingerprint ID, or identifying you via facial recognition.
Certain accounts add an extra layer of protection by using authenticator apps like Google Authenticator, Authy, or Microsoft Authenticator. Typically, these apps generate a verification passcode, which you’ll need to enter when you log in.
3. Always Use a Secure Connection
There were concerns in the not-so-distant past about using a public wifi network to get online, as it could make your information vulnerable to hackers. But today, connecting through a public network is usually considered safe. That’s because most websites protect data through encryption, a process that involves scrambling information so it can only be deciphered using a unique encryption key.
To make sure your connection is encrypted, look for either a lock symbol or “https” to the left of the URL in a browser.
4. Know the Signs of a Phishing Scam
Phishing is the oldest trick in the book. Unfortunately, it also happens to be fairly successful.
Phishing emails and text messages can take many different forms: a link to confirm financial information, an alert about suspicious activity or log-in attempts on one of your accounts, an invoice you don’t recognize, a coupon for a free prize.
One effective way to help prevent falling for these scams? Be cautious about emails that have an attachment or embedded link, and don’t click or download anything from a source you don’t recognize. Keep in mind that legitimate companies usually won’t send you a link to change or update your payment information. If you’re not sure whether a message is authentic, you can call the company directly to confirm.
5. Check Your Credit Report
Checking your credit report regularly is a simple way to help protect your identity and financial security. You can request a free credit report from each of the three major credit reporting agencies, Equifax, Experian, and Transunion, by visiting AnnualCreditReport.com . It will detail all the information about your financial history, including credit card debt, student loans, missed payments and more.
When you receive your credit report, make sure all of the information is accurate. If you notice anything that is incorrect, report it to the credit bureaus and dispute any inaccurate information.
💡 Quick Tip: Check your credit report at least once a year to ensure there are no errors that can damage your credit score.
6. Monitor Your Credit Card and Bank Accounts
Keeping tabs on your credit card and bank accounts doesn’t just help with tracking your spending. It’s also a good way to spot mysterious charges.
Sometimes, a scammer will start with a small, unassuming charge and then quickly escalate their spending when they feel that a person isn’t paying attention. Look for strange names and keep tabs on every purchase, no matter how small.
7. Make Social Media Profiles Private
At first glance, this might seem like an unnecessary step. After all, if someone has your social security and your address, what more do they need? But strengthening your privacy settings on your social media accounts can go a long way to protecting your data in the future. Hackers can use photos, comments, and more to learn about you, which could make it easier for them to break into your accounts.
8. Tap Into Online Tools for Help
As data security becomes more important, the government is getting involved. If you think, or know, that your identity has been stolen, you can visit Identity Theft , the Federal Trade Commission’s website dedicated to cyber security protection. There are resources to help you troubleshoot ongoing issues, create a plan to protect your identity, report identity theft, and more.
9. Update Software
Yes, updating apps, web browsers, and operating systems takes time and may temporarily disrupt your work. But the reward — protecting your data — is worth the few extra minutes. Many times, software updates include new features or improved security.
Set updates to happen automatically so you always have the latest and greatest version.
10. If Your Identity Has Been Stolen, Consider Placing a Credit Freeze on Your Files
By placing a credit freeze or security freeze on your files, you can prevent a potential hacker from opening a new account in your name. The freeze restricts access to your credit report, which makes it difficult for a cyber criminal to open up any accounts.
Freezing your credit does not affect your credit score. However, as long as the freeze is in place, you won’t be able to open any new accounts in your name. If you’re planning to rent an apartment, apply for a job, or buy insurance, you’ll likely need to temporarily lift the freeze for a certain amount of time or for a specific party.
Check with the credit reporting company in advance to find out the costs and lead times. The process is daily involved, as you’ll have to request a credit freeze with all three agencies.
Also, it’s worth mentioning that a credit freeze doesn’t prevent a hacker from adding charges to your existing accounts
11. Consider Placing a Fraud Alert on Your File If You Suspect Identity Theft
This is a much easier option than placing a full credit freeze, as it only requires creditors to confirm your identity instead of freezing all your credit in the future. It may be a good step to take if you are concerned that someone might have been able to access your personal data but lack proof
The Takeaway
Data breaches and identity theft happen, but by taking some simple precautions, you can help keep your personal information from falling into the wrong hands.
Cybercrime isn’t just disruptive, it can also be expensive. That’s why SoFi has partnered with Blink by Chubb to help protect your finances with cyber insurance. Apply in just minutes and get your quote.
SoFi helps you safeguard your digital life.
Photo credit: iStock/ozgurcankaya
Third-Party Brand Mentions: No brands, products, or companies mentioned are affiliated with SoFi, nor do they endorse or sponsor this article. Third-party trademarks referenced herein are property of their respective owners.
External Websites: The information and analysis provided through hyperlinks to third-party websites, while believed to be accurate, cannot be guaranteed by SoFi. Links are provided for informational purposes and should not be viewed as an endorsement.
Financial Tips & Strategies: The tips provided on this website are of a general nature and do not take into account your specific objectives, financial situation, and needs. You should always consider their appropriateness given your own circumstances.
As Mr. Cooper works to investigate and contain the attack, customers are stuck waiting to pay and struggling to access information.
MINNEAPOLIS — As word began to spread this week about a cyberattack impacting mortgage giant Mr. Cooper, many customers didn’t immediately realize that they were impacted until they tried to log on to pay their mortgage.
Others, who have had their payments scheduled to come out automatically, still might not realize the issue. Others, might not even know that Mr. Cooper is the servicer of their mortgage.
“When you’re paying off your mortgage, in most cases, that loan is going to be bought or sold to a servicer. IE, Mr. Cooper,” said Zach Kwakenat, vice president of mortgage lending, for Guaranteed Rate Affinity. “Mr. Cooper is the largest servicer of mortgage loans across the country, actually.”
The company released an update on the incident on Thursday:
Mr. Cooper Group determined on October 31, 2023 that the company experienced a cybersecurity incident in which an unauthorized third party gained access to certain technology systems. Following detection of the incident, we initiated response protocols, including deploying containment measures to protect systems and data and shut down certain systems as a precautionary measure. We value our customers and take their data privacy very seriously, and we have launched an investigation with assistance from leading cybersecurity experts and notified law enforcement.
At this time, we believe this cybersecurity incident was isolated to Mr. Cooper systems and technology and did not affect any of the company’s clients’ or partners’ systems or technology.
Mr. Cooper customers and customers whose loans we service on behalf of our clients who have tried or need to make payments will not incur fees, penalties or negative credit reporting as we work to resolve this issue. We are actively working to resolve the issue and restore our systems as soon as possible, and we are committed to providing regular updates at https://incident.mrcooperinfo.com/.
That information might be news to some customers because the link to that information (and frequently asked questions about the cyberattack) is blocked by some internet browsers, which deem that the connection to the site is not secure.
“I can tell you if consumers do have concerns or they don’t know what to do, they can certainly call the Department of Commerce,” said Jacqueline Olson, Assistant Commissioner of Enforcement for the Minnesota Commerce Department.
Though there isn’t much action for customers to take in terms of paying their mortgage right now, she says it’s a good time to be proactive and check their accounts for signs of identity theft.
“They could contact one of the credit bureaus and place a one-call fraud alert on their credit report,” Olson said. “They only have to contact one of them to make that happen.”
Here are some more FAQ’s about the incident from the Mr. Cooper informational page:
Q: What happened? A: On October 31, Mr. Cooper became the target of a cyber security incident and took immediate steps to lock down our systems in order to keep your data safe. Our systems remain locked down, and we are working on a resolution as quickly as possible.
Q: Was customer data breached as part of this incident? How will I know if my data was impacted? A: We are actively investigating this event to determine if any data has been compromised. If customers are impacted, they will be notified and provided with identity protection services.
Q: What is Mr. Cooper doing to protect me? A: We value our customers and take their data privacy very seriously. Following detection of the incident, we immediately initiated response protocols, including deploying containment measures to protect systems and customer data, as well as shut down certain systems as a precautionary measure.
Q: When will Mr. Cooper return to normal operations? A: We understand how important it is that you be able to access our systems, and we are actively working to resolve the issue and restore our systems as soon as possible. Rest assured, you will not incur any fees, penalties or negative credit reporting related to late payments as we work to fix this issue.
Q: How do I make a payment while the system is down? A: While the system is down, we are not able to process your payment. If you use ACH, your payment will be processed as soon as our systems are operational and you will receive a notification. You do not need to do anything. If you use any other method of payment, you will be able to do so as soon as we resolve this issue. Rest assured, you will not incur any fees, penalties or negative credit reporting related to late payments as we work to fix this issue.
Q: I’m a newly transferred customer. How will this impact me? A: First, welcome to Mr. Cooper. We are happy to have you. The mortgage transfer process can be stressful at any time, and it’s our goal to make it as seamless as possible. This incident may impact when you are able to access your account information for the first time. We are grateful for your patience and will keep you updated with new information as it becomes available.
Q: Will my rate lock be honored? A: Yes, your rate and fees will not be impacted by this incident.
Q: When will I close? A: We understand how important it is that we close your loan on time. We are actively working to resolve the issue and restore our systems as soon as possible. As a reminder, if you are purchasing a home, we will honor our Close On Time Guarantee.
Q: I’m working on a refinance, do I need to worry about my loan terms changing A: This incident will not cause any loan terms to change.
Q: How can I communicate with my Processor or Mortgage Professional? A: Our secure text messaging platform is the best way to communicate with your loan team at this time.
Watch all of the latest stories from Breaking The News in our YouTube playlist:
This article originally appeared on Finder.com and has been republished here with permission.
Credit card fraud is becoming more sophisticated, with scammers using devices called “skimmers” that steal and store your information after you swipe or insert your card.
Thankfully, you can visually identify skimmers if you know what to look for. Here are a few low-tech ways you can keep your card safe.
What Does a Credit Card Skimmer Look Like?
A skimmer is a small device that scammers attach to card readers on ATMs, gas pumps or any other device where you insert your card for payment or withdrawal. They look similar to the card reader itself and might increase the length of the reader by a small amount.
These stealthy devices are a highly effective way for scammers to easily steal your info if you don’t know how to spot them.
I just watched a documentary on the dark web, and I will never feel safe using my credit card again!
Luckily I don’t have to worry about that. I have ExtraCredit, so I get $1,000,000 ID protection and dark web scans.
I need that peace of mind in my life. What else do you get with ExtraCredit?
It’s basically everything my credit needs. I get 28 FICO® scores, rent and utility reporting, cash rewards and even a discount to one of the leaders in credit repair.
It’s settled; I’m getting ExtraCredit tonight. Totally unrelated, but any suggestions for my new fear of sharks? I watched that documentary too.
…we live in Oklahoma.
How Does a Skimmer Work?
When you insert or swipe your credit or debit card, the skimming device captures the information found in your card’s magnetic strip. You’re able to complete your transaction like normal, but the crook who installed the skimmer can collect the skimmer later, download your information and make purchases or withdrawals without your knowledge.
What’s in My Card’s Magnetic Strip?
A wealth of information is stored in that little black strip on the back of your card. It contains the name of your bank or issuer, your name and country, your account number and PIN and other details specific to your account, like your account limits and the types of charges your card accepts. In short, enough to make purchases with your data.
How Common Are Gas Pump and ATM Skimmers?
While there isn’t a great amount of data on the prevalence of skimmers, it’s thought that their use is on the rise. A single credit card skimmer can capture information on up to 100 credit cards in a day.
Credit card chip technology has done a lot to prevent skimmers at retailers and most major ATMs, so gas stations and non-major ATMs remain the primary targets of skimmers. This may change since gas stations now must comply with the merchant fraud liability shift from October 2020.
How to Spot and Avoid Credit Card Skimmers
Although skimming can happen almost anywhere you use your card, you can prevent losing your data to a skimmer.
Here are a few simple ways to stay safe:
Study the card reader. Jiggle or shake the card reader before using it. Skimmers are often not securely attached, and moving it around could release and expose it. Look for ATMs, gas pumps and any other credit card readers in well-lit and monitored locations.
Give your card a glance. Scratches, markings or stickiness left on your card after swiping are all signs that your card may have been tampered with.
Manage your card settings. Most offer a way for you to control where your card can be used. For instance, you can set parameters that limit high-total purchases or request notification by text or email if your card is used online rather than in person at a store.
Track your balances. Monitor your account balances to avoid being blindsided by an overdraft or unauthorized purchase. By adjusting notification services, you can be informed if an attempt is made to charge over an allotted amount.
Dip your chip. Using the chip reader, instead of swiping the magnetic strip, significantly lessens the chance of fraud. If your card doesn’t have a chip, request one from your financial institution.
Consider cash. At the pump, pay for your gas inside or with an attendant. For other purchases, sign and save your receipts until you’re able to verify purchases on your next statement.
What to Do If Your Credit Card Has Been Skimmed
If you suspect your credit card information was skimmed during a recent transaction, you should respond with a few common measures. This includes notifying your bank, alerting the FTC and placing an initial fraud alert.
From here, keep an eye on your credit card accounts. Regular monitoring of your account can keep you informed of any unusual activity and let you quickly respond. You can also contact a credit monitoring service to help you maintain oversight of your account. These services automatically notify you if any changes or activity occur on your account.
Most credit cards at this point possess an EMV chip for an additional layer of security. If your credit card doesn’t have this feature, call your bank and see if you can receive a card that has one. While they won’t protect you from skimming, they do help protect against other forms of credit card fraud.
Moving forward, take a closer look at the card reader at any ATM or gas station you use. If it looks unusual, such as misaligned, loose or a different color than the rest of the device, you should skip on using your card there.
How Do I Report a Skimmer?
If you find a skimmer or confirm that you’ve been a victim of one, first call your financial institution to let them know when and where you think it happened. Cancel your card and request a replacement, and follow up by email to further document your claim.
From there, place an initial fraud alert on your card. A fraud alert requires businesses to contact you before issuing credit in your name for up to 90 days.
Filing a police report and alerting the Federal Trade Commission (FTC) are also good practices. The FTC works to prevent skimming rings and catching crooks that skim.
Bottom Line
There’s no sure-fire way to prevent skimming. Every time you swipe your card, there’s a chance someone could be attempting to carry off your info. Be aware of how and where your card is used to significantly decrease the likelihood of your personal and financial details being skimmed. Read more about credit card security to keep your personal finances safe.
When it comes to your overall loss after your ATM or debit card has been stolen or skimmed, the amount of your liability will depend on factors that include how quickly you report it and how much is stolen from your account. Call first and follow it up in writing to start an investigation.
Federal law limits a cardholder’s liability for fraudulent charges, under certain circumstances. For credit cards, generally your liability caps at $50 if you report it within two days. For a debit card, your liability is usually the same within two business days, but $500 if it has been more than two business days after you report it, but less than 60 calendar days after your statement. Anything more than 60 days, and you’re likely liable for all the money in your account. If you report fraud immediately, your liability could be $0.
Frequently asked questions
What does a skimmer look like?
Skimmers vary in appearance based on where they are located. YouTube offers many videos showing how you can spot one.
Do police investigate credit card skimming?
Generally, no. Cases of skimming are best resolved by your bank and FTC. However, you can still call your local police to inform them of recent skimming practices.
Will I have to pay for fraudulent charges made to my credit card?
Federal law limits a cardholder’s liability for fraudulent charges to $50, under certain circumstances. By calling your credit card’s customer service line, you’ll likely find they’ll waive even that amount.
When it comes to your overall loss after your ATM or debit card has been stolen or skimmed, the amount of your liability will depend on factors that include how quickly you report it and how much is stolen from your account. Call first and follow it up in writing to start an investigation.
The Federal Trade Commission’s Consumer Sentinel Network report for 2020 notes that 1.4 million people filed complaints about identity theft in 2020. Overall, reports related to fraud and identity theft were up in 2020 compared to 2019. Learning how to prevent identity theft helps you protect yourself against these types of issues. Discover eleven ways to prevent identity theft below.
1. Protect Your Social Security Number
Criminals collect personally identifying information, such as Social Security numbers, and use it to take out debt or get benefits in your name. You can avoid identity theft by guarding your Social Security number.
Don’t carry your Social Security card with you, and add your SSN to applications and other forms with care. Before you put your SSN on any form, make sure you’re dealing with a reputable organization. Ask to see their privacy policy and ensure they’ll work to safeguard your information. You should also avoid sending your SSN via text, chat messages or emails.
2. Shred Sensitive Paper Documents
Your bank and credit card statements, mortgage bills, medical records or other documents could hold a lot of sensitive information. In the wrong hands, that data could be the ingredients for a fraud or identity theft scheme.
Keep your personal information out of the wrong hands by shredding these types of documents instead of tossing them into the garbage. You can purchase a shredder for your home office. Some towns also have shredding days where you can bring your papers to a central location to be shredded. Check local news sites or town government sites to find out if that’s an option in your area.
3. Review Your Mail Daily
Fraudsters might go as far as to steal mail right from your mailbox. One of the easiest ways to prevent identity theft is to take your mail in daily and as close to the delivery time as possible.
And don’t let it stack up without opening it—review mail daily to ensure you’re not receiving anything that might raise suspicions. For example, if you get a credit card in the mail you didn’t apply for or a medical bill for services you didn’t receive, you should check into the matter. Those might be signs of identity theft.
4. Don’t Log Into Sensitive Accounts Via Public Wi-Fi
When you’re on public Wi-Fi systems, your connection is not 100% secure. Other people on the network might be able to see what you’re doing. Don’t log into sensitive accounts, such as banking or benefits portals, when you’re on public Wi-Fi if you can avoid it.
5. Use Strong Password Management
Safeguard your online accounts with strong password management. Follow these tips to make it less likely hackers can get into your accounts to steal your information or funds:
Don’t use the same password across multiple sites.
Never use a password that’s easy to guess. This includes passwords with information such as your birthday, first or last name, address or names of your pets or relatives.
Use random combinations of numbers, letters and symbols.
Create longer passwords—12 or more characters are a good length to aim for. Microsoft advises a minimum length of eight characters.
Don’t share or write down your passwords.
Change your passwords periodically. You might want to set a schedule and change them every 90 days.
6. Set Up Two-Factor Authentication
Use two-factor authentication any time it’s offered by a website or app. This creates a second layer of security so someone can’t log in as you with just your password. Here are a few ways two-factor authentication might work:
You log in with a password and a biometric, such as a face or fingerprint scan.
You log in with a password and then respond to a link sent to your email or phone.
You log in with a password and then enter a code sent to your phone via text message.
7. Don’t Post Sensitive Information on Social Media
Hopefully, you know not to post information such as your SSN or credit card number on social media. But did you know you might be sharing critical data with hackers by playing so-called social media games?
People post questions on social media asking about the names of pets or when your birthday is. They also post games where you use information such as your middle initial, month of birth and day of birth to create a “fantasy fairy name” or another nonsensical response based on a chart.
Each time you respond to such queries, you expose some of your personal information. It’s a good idea to avoid that type of content on social media. You may also want to check privacy settings on sites such as Facebook and Instagram to ensure only people you know can see your posts.
8. Be Skeptical of Callers Who Want Money or Information
Common scams involve someone pretending to be from a charitable, government or debt organization on the phone. These fraudsters try to get you to share personal or account information with them so they can use it to steal your money or identity.
The best way to combat this issue is to avoid sharing personal information on the phone if someone called you. Instead, let them know you’re concerned about the security of your information and you’ll call back on the published customer service line. Then look at your statements or go to an official website to find a call-back number.
9. File Your Income Tax Return as Early as Possible
Another common scam is to file fraudulent income tax returns and steal someone’s refund. Protect yourself from this potential crime by filing your income tax return as soon as you can. Since only one person can file, if you beat the criminals to the punch, they can’t pretend to be you and collect your refund.
10. Monitor Your Credit Reports
One of the first signs that you’re a victim of identity theft might be unusual activity on your credit report. That could range from a hard inquiry you didn’t approve—indicating someone else is trying to get credit in your name—to a collections account for the debt you don’t recognize.
Monitoring your credit ensures you’re aware of these signs as soon as possible. The sooner you become aware, the faster you can take action to protect yourself against further identity theft.
11. Place a Freeze on Your Credit Reports
You can also freeze your credit reports. This means no one can pull them to evaluate you for credit. That limits identity thieves who want to piggyback on your good credit to take out debt in your name.
However, remember that the freeze applies to you too. If you plan to apply for credit, you’ll have to unfreeze your reports temporarily so the lender can check your credit.
Sign Up for Identity Protection Today
Looking for identity protection? ExtraCredit can help. It includes Guard It, an identity protection tool with $1 million identity theft protection insurance, proactive fraud alert and more. Plus, ExtraCredit includes tools that gives you access to your credit score and credit reports. Because you can never be too careful.
Do you think it’s possible someone stole your tax refund check? You wouldn’t be alone. In 2020, just under 1.4 million people reported cases of identity theft, and around 400,000 of those involved the theft of government benefits or documents—including tax refunds. The issue was concerning enough that the IRS started what it calls Identity Theft Central to provide information about identity theft.
Find out how identity theft happens below. Then learn what action you should take if you believe your tax refund was stolen.
How Does Identity Theft Happen?
Identity theft occurs when someone gathers enough information about you that they can impersonate you to a sufficient degree to commit fraud. For example, if someone gets enough of your sensitive personal information, they can apply for credit cards in your name. They receive the cards after approval, run up balances and never pay them because the account is all in your name.
Another version of identity theft occurs when someone has enough information to file a fake tax return in your name. They get a refund in your name, and when you go to file your legitimate tax return, you find you can’t get a refund. Someone stole it out from under you.
Some methods people use to get the information required to commit identity theft include:
I just watched a documentary on the dark web, and I will never feel safe using my credit card again!
Luckily I don’t have to worry about that. I have ExtraCredit, so I get $1,000,000 ID protection and dark web scans.
I need that peace of mind in my life. What else do you get with ExtraCredit?
It’s basically everything my credit needs. I get 28 FICO® scores, rent and utility reporting, cash rewards and even a discount to one of the leaders in credit repair.
It’s settled; I’m getting ExtraCredit tonight. Totally unrelated, but any suggestions for my new fear of sharks? I watched that documentary too.
…we live in Oklahoma.
Imposter scams. The scammers email, call or otherwise contact you while pretending to be someone else, such as the IRS. They use that contact to try to get personal information out of you.
Social media scams. Scammers comb social media, looking for personal information people might have shared. They also use direct messages to try to get information from you.
Dark web databases. If your information is included in a data breach, it may be shared or sold to scammers online.
Checking your trash. In some cases, scammers simply go through unshredded documents in the garbage to get the information they need.
When someone uses information in this way to file a fake tax return, it’s a crime called Stolen Identity Refund Fraud. There are serious penalties for this crime. It’s always best to safeguard your private information as much as possible to reduce your risk of becoming a victim.
How to Know if Your Tax Refund Was Stolen
The IRS provides a tool called Where’s My Refund? that lets you track the status of your refund. If you’re worried someone has filed a fake return in your name or tried to steal your refund check, use that tool to see what’s going on with your refund. You can also ask the IRS to do a refund trace to find out more about where the tax refund check or deposit went.
The IRS will also notify you when more than one return is filed in your name for a particular year. If you file a tax return and receive this notice, there’s a good chance some fraud has occurred.
Important Steps to Take after Tax Refund Fraud
If you’ve received a notice from the IRS stating that more than one return has been filed in your name, or if you believe your identity has been used fraudulently, you should act quickly. Follow the steps below.
1. Report the Fraud
If your Social Security number was compromised and you think you may be the victim of tax-related identity theft, file a report with your local police and file a complaint with the Federal Trade Commission at www.identitytheft.gov or by calling the FTC Identity Theft Hotline at 1-877-438-4338.
2. File a Report With the IRS
Once you’ve filed a police report, file an IRS Form 14039 Identity Theft Affidavit. Print the form and mail or fax it according to the instructions.
3. Pay Your Taxes
Be sure to continue to pay your taxes and file your tax return on time, even if you must do so by mailing in paper forms.
4. Check Your Credit Reports and Scores
Just because you were first alerted to the problem through a false tax return doesn’t mean that’s where the ID theft started. A sudden drop in credit scores can be a sign your identity has been stolen. You should also monitor your credit reports for activity that isn’t yours.
You can get a free copy of your credit report from each of the major credit bureaus at AnnualCreditReport.com. You can also check 28 of your FICO scores and get regularly updated information about your credit reports and scores when you sign up for ExtraCredit.
5. Add Fraud Alerts to Your Credit Reports
Contact each credit bureau and add a fraud alert to your credit report. You can do this online or via phone. A fraud alert makes it harder for someone to apply for credit in your name.
6. Close Any Fraudulent Accounts
Reach out to creditors to close any accounts opened in your name fraudulently. You should also report them as fraudulent to the banks and lenders.
7. Change All Your Passwords
Thieves know people use the same password for multiple websites and accounts. Change all your passwords immediately if you believe you’re the victim of identity theft or fraud. It’s also a good idea to change your passwords regularly, even if you aren’t a victim of identity theft.
8. Follow Up on Your Case
If you informed the IRS about taxpayer ID theft and didn’t receive a resolution, contact the Identity Protection Specialized Unit at 1-800-908-4490 about your case. If you’re experiencing financial difficulties because of the delay, you can reach out to the taxpayer advocate service, an independent organization within the IRS, at 877-777-4778.
9. Stay Calm & Be Patient
A typical case of ID theft can take an average of 120 days to resolve, according to the IRS. Remember that the average might not reflect your case, and it could take a year or more to resolve it.
Just remember, the IRS will eventually pay you your refund, but if you’re experiencing financial difficulties because of the delay, you can contact the taxpayer advocate service, an independent organization within the IRS, at 877-777-4778.
File Your Tax Return as Early as Possible
One of the best defenses against this type of identity theft is an early offense. Get your tax return in early to beat potential fraudsters to the punch.
If you use your credit card for everything, from paying bills to ordering takeout to booking trips, you put yourself at risk for fraudsters to steal your credit card information.
One way to protect your sensitive information is to put a freeze on your credit report. A credit freeze provides you with an extra layer of security because it prevents anyone from running a hard inquiry on your report or potentially opening a new line of credit without your permission.
But at some point you might want to open a new credit card or apply for a loan. So how do you unlock a credit freeze? In this guide, you’ll learn all about how to unfreeze credit.
💡 Quick Tip: A SoFi cash-back credit card is a great way to earn rewards without a complicated redemption process. Even better, SoFi doesn’t place limits on the amount of cash-back rewards you can earn.
What Does it Mean to Unfreeze Credit?
When you freeze your credit report, you can’t open a new line of credit, whether that’s a credit card, mortgage, auto loan, or something else. At the same time, no one can run a hard inquiry on your credit report — so lenders, landlords, even potential employers can’t access it. While there are limits on who can legally look at your credit report, a credit freeze can provide peace of mind that no one can open an account in your name.
When you unfreeze your credit, it’s like you’re turning back on the credit report. Once your credit is unfrozen, you can once again open a new line of credit, and lenders can run a hard pull on your report.
Unlimited 2% cash back rewards*
Earn 3% cash back on up to $12,000 in purchases your first year when you set up direct deposit through SoFi.** After that, earn 2% unlimited cash back on everything.*
How a Credit Freeze Works
Also known as a security freeze, a credit freeze restricts access to your credit file. Credit freezes don’t happen automatically. You have to reach out to each of the three credit bureaus — Experian, Equifax and TransUnion — to ask for a credit freeze. Thanks to the Fair Credit Reporting Act, if you request a credit freeze over the phone or online, the credit bureaus are required to freeze your report within 24 hours. If you send the request via mail, they have up to three business days.
When you make a credit freeze request, each bureau will give you a PIN (personal identification number) or password that you need when you decide to lift the freeze.
A credit freeze is often confused with a credit lock, but they’re two separate things. A credit lock is a service you sign up for, and there’s usually a subscription fee. It’s similar to a credit freeze as you block access from most lenders. However, you can freeze or unfreeze it at any time on your phone or computer, and you don’t have to wait for it to go into effect.
A credit freeze is free, and you have to go through the credit bureaus to thaw your credit, and it takes about an hour to go into effect.
Types of Credit Freeze Lifts
At some point you may think about unlocking your credit freeze. When the time comes, there are two main types of credit freeze lifts:
Temporary lift
A temporary lift will unfreeze your credit report for a designated time period. You can choose how long you’d like your credit to be thawed, but it’s typically anywhere from one to 30 days.
You can thaw your credit freeze temporarily to apply for new credit, take out a loan, or apply to rent an apartment. But once you’re done with that financial task, the freeze restarts.
Permanent lift
A permanent lift will thaw your credit freeze for an indefinite amount of time. You might want to go this route if you don’t want to go through the steps of freezing and unfreezing your credit and find that the trouble isn’t worth the benefits.
Recommended: How to Read and Understand Your Credit Report
Ways to Unfreeze Credit Using Bureaus
How do you unfreeze your credit? You just need to contact each of the credit bureaus. You can do it in one of three ways:
• Phone: If you request a lift by phone, the credit bureaus are required to thaw your credit within an hour.
• Online: If you make the request online, your credit freeze will also be lifted within the hour.
• Mail: You can also request a credit thaw by mail. If you go this route, expect the lift to happen within three business days.
Recommended: How to Dispute a Credit Report and Win Your Case
When You Should Unfreeze Your Credit
Generally, you need to unfreeze your credit anytime someone needs to review your credit report, like if you’re opening a new line of credit or applying for a loan. Some common scenarios of when you’ll need to unfreeze your credit:
• Applying for a credit card
• Applying for a mortgage, personal loan, or car loan
• Applying for a line of credit
• Hunting for an apartment
Recommended: Common Credit Report Errors and How to Dispute Them
Credit Freeze vs. Fraud Alert
If you’re at high risk for fraud, or you suspect you’ve been a victim of a credit card scam, or you just want to take extra precautions, you can set up a fraud alert on your credit report. When you have a fraud alert in place, a lender or creditor needs to verify your identity before they can issue you a new line of credit or approve you for a loan.
To place a fraud alert, you only need to reach out to one of the three credit bureaus. By law, that credit bureau must let the other two credit bureaus know you placed a fraud alert. In turn, all three credit bureaus will place a fraud alert on your credit file.
Initial fraud alerts are free, and initial fraud alerts last one year. After one year, you can renew it. Extended fraud alerts last for seven years, but they are for victims of identity theft, and you must submit a police report to qualify.
A credit freeze, on the other hand, blocks any party, including lenders and creditors, from accessing your credit. You need to place a credit freeze separately with each of the three credit bureaus, which lasts indefinitely. They can only be lifted when you make a request.
💡 Quick Tip: On-time payments are key to building your credit score. To ensure that you make your payments in time, consider setting up automatic payments or set a calendar reminder of your due date.
The Takeaway
Unfreezing your credit report is relatively simple, and it’s easy to set up a temporary lift should you decide you want to apply for a new credit card or personal loan. There are a few different ways you can go about thawing your credit as needed, and the credit bureaus have to unfreeze your credit within an hour of you making the request by phone or online.
Looking for a new credit card? Consider a rewards card that can make your money work for you. With the SoFi Credit Card, you earn cash-back rewards on all eligible purchases. You can then use those rewards for travel or to invest, save, or pay down eligible SoFi debt.
The SoFi Credit Card offers unlimited 2% cash back on all eligible purchases. There are no spending categories or reward caps to worry about.1
Take advantage of this offer by applying for a SoFi credit card today.
FAQ
Can I unfreeze my credit?
You can unfreeze your credit anytime by going through each of the three credit bureaus — Experian, Equifax, and TransUnion — and requesting a lift on your credit freeze. You can ask for either a permanent or temporary lift. The thaw usually lasts anywhere from one to 30 days if it’s temporary.
Can you freeze your credit automatically?
Credit freezes don’t happen automatically. You will need to contact the three credit bureaus and make a proper request. You can do so online, by telephone, or via snail mail.
How soon can I unfreeze my credit after freezing?
You can unfreeze your credit as frequently as you like and request a credit lift as soon as you freeze it. If you made the request online or over the phone, it can take up to an hour to unfreeze your credit. If you send the request in the mail, it can take up to three business days.
How long does it take to unfreeze your credit?
It depends on the credit bureau and how you made your request. If you requested your credit to unfreeze or “thaw” over the phone or email, the credit bureaus must lift it within an hour. If you made the request by mail, the credit bureaus must unfreeze your credit within three business days.
Can I still use my credit card after freezing my credit?
Freezing your credit doesn’t impact your ability to use your credit card. You can freely make purchases on your card, book trips, redeem your cash-back points, and so forth. But if you want to do something that requires a hard pull of your credit — apply for new credit, loan, or submit a rental application for an apartment — you’ll need to unfreeze first.
Photo credit: iStock/nortonrsx
The SoFi Credit Card is issued by The Bank of Missouri (TBOM) (“Issuer”) pursuant to license by Mastercard® International Incorporated and can be used everywhere Mastercard is accepted. Mastercard is a registered trademark, and the circles design is a trademark of Mastercard International Incorporated.
Third-Party Brand Mentions: No brands, products, or companies mentioned are affiliated with SoFi, nor do they endorse or sponsor this article. Third-party trademarks referenced herein are property of their respective owners.
Checking Your Rates: To check the rates and terms you may qualify for, SoFi conducts a soft credit pull that will not affect your credit score. However, if you choose a product and continue your application, we will request your full credit report from one or more consumer reporting agencies, which is considered a hard credit pull and may affect your credit.
SoFi cardholders earn 2% unlimited cash back rewards when redeemed to save, invest, or pay down eligible SoFi debt. 1
The average American has four credit cards, according to Experian, the credit reporting agency. However, travel rewards enthusiasts may differ slightly from the average American regarding credit cards and may carry more than four cards. But if you’re new to points and miles or just taking it slowly, you may not have a wallet full of credit cards.
Whether you’re above, below or on average regarding the number of credit cards you hold, you probably don’t bring them all with you while traveling. But have you ever thought about how many you should bring and what types?
Let’s dive into why it’s important to travel with at least two cards and some best practices for your backup card, whether you’re traveling within the United States or internationally.
Card network issues
There are four major credit card networks in the United States: Visa, Mastercard, American Express and Discover. Credit card networks facilitate transactions between a merchant and an issuer. Some, such as American Express and Discover, are both a network and an issuer. On the other hand, Visa and Mastercard are only networks and have various issuers. If you have a Visa credit card, it will be issued by a bank, such as Chase or Bank of America, whereby a Mastercard credit card could be issued by Citi or Wells Fargo.
Visa and Mastercard credit cards tend to be widely accepted in the United States and abroad; American Express and Discover are less so, especially abroad. Suppose your primary or everyday spending card at home is an Amex or Discover. In that case, bringing a Visa or Mastercard while traveling is a good idea if you encounter merchants that do not accept Amex or Discover. And in the rare instance that a network suffers an outage and you can’t make any purchases, you’ll be able to switch to a backup card on another network.
Bank or issuer problems
You may also need another card in cases where your primary card is lost, stolen, declined or locked due to a fraud alert. If possible, your backup should be a card from a bank different from your primary card.
Worst-case scenario, if a bank or issuer flags your accounts for suspicious activity and locks all of your accounts while traveling, you can switch to a card from a different bank. But if all of your cards are from the same bank, you’ll be out of luck until you’re able to clear up the issue with your account, which could get problematic if you’re in the middle of a transaction, in a time crunch, or unable to contact your bank.
Keep a backup card in the hotel room safe
In some cases, like if your card is declined or locked, it would be helpful to have a second card with you at all times to still be able to complete your transaction. However, the general advice is to keep your backup card somewhere secure, like in your hotel room safe. If your wallet is lost or stolen and all of your cards are in it, you’ll wish you had set aside at least one card for safekeeping.
Some travelers even go as far as keeping a second, or decoy, wallet. Some carry a decoy wallet with a small amount of cash, and some closed or expired credit cards to fool a mugger or pickpocketer if an unfortunate incident occurs. Others use a second wallet to carry around just the card they need for the day, while the main wallet and other cards remain safe in the hotel room.
Reward your inbox with the TPG Daily newsletter
Join over 700,000 readers for breaking news, in-depth guides and exclusive deals from TPG’s experts.
With the growing acceptance of mobile payment methods (such as Apple Pay and Google Pay), even internationally, you may also want to add multiple cards to your mobile wallet. You or a merchant may still prefer to use the physical card, but at least you’ll know the mobile wallet option is there in a pinch.
Should you take more than two cards?
Sure, but if any are lost or stolen, it could be a big headache as you’ll make many phone calls to cancel cards. And who wants to spend their vacation doing that? It’s understandable why you may want to bring a variety of cards if you’re trying to maximize rewards by using multiple cards for different spending bonus categories on your trip, but keep at least one card back in your hotel room safe.
Bottom line
When planning what to pack for your next trip, don’t forget to pack an extra credit card. There are quite a few scenarios during travel where having a backup card can come in handy. At the very least, even if you only use one card during your trip, you’ll have peace of mind that if something goes wrong with your primary card, you still have a way to pay for your purchases.