Dangers You Should Avoid If You Have Multiple Credit Cards

It doesn’t matter whether you just received your first few credit cards in the mail or you’ve got several well-worn pieces of plastic in your wallet already – owning multiple cards can prove to be more dangerous than you think.

In fact, the more cards you have, the greater the chances that you’ll run into a debt snowball situation, which can really wreck your finances.

Here are several ways to avoid such an outcome:


Don’t Have More Than 3 Credit Cards

Unless you have a photographic memory or a systematic way of monitoring your budget and tracking your payment due dates, stick with 3 credit cards maximum. If you own many credit cards, it’s easy to forget not only how much you spend, but when payments are due.

But if you have no more than 3 cards, you can actually maximize your benefits better by delegating one card to a specific purpose, such as using one for purchasing petrol, one for groceries, and one for online shopping. This makes it easier for you to stick to your budget and monitor spending.


Never Cancel Your First Credit Card

Your first credit card might not hold much sentimental value, but that’s not reason to get rid of it even if it’s not your best one. You should hold onto it because it represents the longest credit history you have with the issuing bank, which looks very good on your credit – so make sure you always pay this card on time.


Use Your Lowest Limit Card for Online Shopping

When buying items online, it’s not too hard to get carried away – especially when there’s tons of “good deals” out there. So if you know you’re susceptible to getting a little carried away with your online spending at times, it’s a good idea to designate the credit card with the lowest limit for online purchases.

And if your credit cards all have similar spending limits, ask your bank to lower the credit card limit to whatever budget you have in mind to further limit your spending.


Types of Credit Card Fraud to Avoid

Credit card fraud is a global crime that’s on the rise. The unfortunate thing is that it’s not that difficult for criminals to steal your credit card information and make purchases halfway around the world. In fact, fraud can come in all forms – from a thief with a card skimmer, to a phishing email.

Here are several types of credit card fraud to avoid:


The Credit Card Swap

This kind of scam can occur in any number of places – from electronic markets and bars to lounges. The scam is quite simple. You’ll hand over your credit card to an attendant to make payment, and he/she will come back with it wrapped in your receipt.

By the time you finally notice that the credit card in the receipt is not yours, but someone else’s expired card, it has already been used for a shopping spree. To avoid this, be alert and always check both your card and receipt after every purchase, especially at bars and lounges.


Credit Card Skimming

This scam is usually committed at food and beverage outlets because the card is removed from view for payment. When your card is taken for payment, the server (or someone appearing to be a server) will run the card through a skimmer.

But your skimmed credit card information may be used to make fraudulent purchases. The way to avoid this scam is to pay attention to where your attendant is taking your card. Also, some scammers attach the skimmer to their ankle, so beware if he/she “drops” the card and tries to skim it while picking it up.


Email Phishing

This scam occurs when you respond to an email coming from your bank or credit card issuer asking for your credit card information because of a “security” breach. Many times, these email look convincing with official looking logos and signatures. But they’re only a scam to get your credit card information.

The reality is that banks will never ask for your credit card information via email. So any email that asks for it should be seen with suspicion. Also, never click on any links within such an email, as it will probably install some kind of spyware on your computer.


Clone Websites

This scam takes advantage of search engine typos (ex: typing Amazzon instead of Amazon), taking you to a clone website that mimics the official site. The clone site will be filled with pop up surveys offering free products or cash.

But that’s part of the scam, as the survey will want your address, email, and will eventually lead to a cloned bank site that will ask for your banking and identification details. The only way to avoid this scam is to steer clear of online surveys and registration forms that as for such personal information.


Call Scams

It’s a sad fact that some call center “professionals” abuse their job by using it as a way to pry your credit card information from you. For example, you may receive a call from your one of your service providers, but you’ll notice odd questions trying to get your banking or identification information – which can then be used for fraudulent purchases.

The way to avoid this scam is to avoid giving any banking or personal information to call center operators unless you know what the purpose is – even then, you should call the company directly to get confirmation of the call’s purpose.