The best way to protect yourself against credit card fraud


There is no soft way to say this. There are many evil criminals. Individual hackers, organized crime gangs, terrorist groups, and even nation-state actors are enriching themselves at our expense. While there are as many types of cybercrime as there are criminals, there is one overriding constant: your bank account is at risk.

A few weeks ago, our very own Charlie Osborne wrote about his personal experience with credit card fraud in: “Here is the startling lesson I learned as a victim of debit card fraud”. She is far from alone.

Many of us at ZDNet (and many of you) – including me – have experienced what happens when a criminal gains access to your card. Sometimes there are a bunch of little charges where the criminals are testing the waters to see which cards work. Other times there are huge fees, often the cleaning up of accounts or the accumulation of huge bills.

Either way, it sucks. It is also very difficult to defend against. Because so many retailers are breached with such a degree of regularity, nearly every one of us has seen our personally identifiable information fall into criminal hands.

The reality of the situation is grim. Whatever you do, your credit card information will end up in criminal hands. You will inevitably find your finances under attack. Short of hiding all your money under your mattress, there’s really nothing you can do to prevent it.

But that doesn’t mean you can’t protect yourself

First, let me tell you what might not work. There are hundreds of companies that promise to monitor your accounts and notify you of illicit activity. Some offer guarantee promises if you are a victim.

I won’t mention specific companies, but I will tell you that while using these companies can sometimes help, you’re not as well protected as you’d like. First, not all companies can successfully monitor your accounts. Some companies are not companies at all; they are just fronts for data collection operations.

These companies also add another vector of risk. You give them all your information, hoping they will protect you. But you are exposing yourself to additional risk because one more entity now has an overview of your overall financial situation.

Don’t rely on others to keep your finances secure. You have to do it yourself. There is a single, relatively simple practice that you can and will use much more safely than you would with any other approach.

Banks and bills

At the very beginning of my first business, money was very, very tight. I needed to know, every day, exactly how much money we had and who we owed. So at the time I started making a short list of what I called “banks and bills”. It was a list of the amount of money in each bank account, my current bills for everything I owed (and the company), and any very short-term expected receivables.

To be honest, doing all of this once a day was a huge hassle. But I was self-funded with a payroll, and that got us through some really tough times. We managed to make the payroll and keep the business afloat.

I started practicing banks and bills long before the level of hacking we see today was a problem. But because I was doing so, fraudulent credit card activity became immediately apparent.

I don’t have to do payroll anymore, but my wife and I still have a bank and bill meeting every week.

Here’s how

What’s interesting is that this practice not only helps you catch credit card fraud, but also helps you manage your financial situation, stick to a budget, and make conscious spending decisions.

In other words, it’s a good practice, even if you don’t fear fraud.

The process takes between fifteen minutes and an hour every week. Again, for fraud protection, you don’t need to be as strict as I am. However, it is one hell of a money management solution, so I recommend you follow through.

We have a spreadsheet with sections for bank accounts, retirement accounts, credit cards, and other bills.

Every week we create a new copy of the spreadsheet. You can use tabs, but since I have a lot of additional analytics on other tabs, I prefer the simplicity of a new sheet. I simply copy the previous week’s spreadsheet, give it a new date, and make changes.

We have one item for each bank account and another item for each credit card. During our Banks and Bills session, we log in to each account individually and copy the balance to the spreadsheet.

Note that some services, such as Quickbooks, theoretically allow this information to be downloaded automatically. But they may not be reliable. Additionally, we’ve found that by taking a few annoying moments to log into each account, we can take a peek at the activity. It is there, in this glance, that one can often spot parasitic activities.

That’s the key. When you log in to each account, view the account’s charges and activity. Do you see anything weird? Do you live in Florida but do you have gas station fees in Indiana? Are there a bunch of weird little fillers? Is your balance suddenly much lower than it should be? Are there random one or two cent charges that don’t make sense?

Usually, banks and credit card companies operate fraud services, but their algorithms do not always detect all possible inconsistencies. But if you notify them of fraudulent activity in a timely manner, they will usually reinstate your account.

This is another key reason to do it every week. If you discover something, you can work with your banking partners to resolve the issue. That way, it’s not something you discover months later, perhaps after the date of any possible resolution has passed.

We do a few other things with banks and bills. We have a dashboard outlining our overall credit card debt. I never like this amount going over a certain threshold, so it’s a quick way to tell, at a glance, if we’re in the danger zone.

We also have interest rates listed next to each card. Some of the cards have 0% rates for a year or two, so we have what we call a “pumpkin date” listed next to those cards. These are the dates on which the interest-free deal turns into a pumpkin. We want to make sure that we repay these accounts before they collapse.

We also make sure to pay off high interest cards and credit accounts sooner, especially if they start to accumulate. It’s not easy to remember which cards are eating you alive with interest charges, but the Banks and Bills Spreadsheet makes it immediately apparent.

Finally, I have a chart of Current Net Worth and Current Liquid Net Worth. Equity includes things like the value of my home, which isn’t exactly a liquid asset. Liquid net worth is the amount of money we have that could be turned into cash fairly quickly.

Our goal with both charts is to make sure they always go up. If either net worth indicator drops for too many weeks, that’s an indicator that we’re spending above our income, and that’s never really good practice.

As I said, overall this process takes less than an hour a week – and often as little as ten or fifteen minutes if we’ve kept the numbers up to date. We have, on several occasions, found evidence of credit card fraud while doing this. Because we had a weekly summary of the activity history, we were able to provide this information to the bank, which facilitated recovery.

To reiterate: This is the best way to protect yourself. It’s because you don’t delegate your financial affairs to anyone else. Think about it. With such a prevalence of breaches, no matter who you choose to delegate your financial monitoring activities to, that delegate may also be the victim of a breach.

You can be sure you’re safe by checking each account manually every week. Do it now. Do it every week.

Finally, my wife (who was the CFO of my company long before we got married) had a few more recommendations. She said making money management, whether for a business or a family, a hobby. It must be part of your constant and continuous practice for it to be a priority. She also recommended a blog she likes called Budgets Are Sexy. Check it out.

You can follow updates of my day-to-day projects on social networks. Be sure to follow me on Twitter at @DavidGewirtzon Facebook at, on Instagram at and on YouTube at

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