Indications of credit card scams

Credit cards:

Cards that permit credit card holders to spend for desired goods and services within the given credit card limit are credit cards. Credit card holders use their credit cards for purchasing goods or services on a credit and then pay the credit card debt within a specific due date. If they don't pay by the due date, the interest on their credit card debt increases. These credit cardholders should carefully use their credit cards as credit card scams are occurring on an ever growing scale. People lose their credit cards even before they realize it. As a result, the number of credit card victims are drastically increasing. Hence, people should educate themselves regarding credit card scams and their preventive measures.

Functioning of Credit cards:

Credit card payments function in the same manner as a loan. When you start the payment with your credit cards, you are taking money from the credit card provider.
While purchasing with your credit card, the seller's bank receives your details.
The credit card network authorizes the bank to process the credit card transaction.
Your credit card provider verifies your credit card information and gives approval or denies the transaction.
The payment is made to the merchant when the credit card provider approves the transaction.
After that, your credit card provider issues your monthly credit card statement, which consists of the amount you spent and the available balance on your credit card. It also contains the information of the due date on your credit card bills.

Benefits of using credit cards:

There are many below-mentioned benefits of using credit cards.

With credit cards, you can purchase anything. Credit card payments are acceptable worldwide. It is also convenient in the case of traveling.
Credit cards even acquire reward points when you utilize them.
You can spend the money on your credit card and then pay the credit card debt later.
Monthly credit card statements give you a clear idea of your monthly transactions and the credit card debts that you must pay. There are records of the amount you have spent in a month on your monthly credit card statements.
There are many consumer protection add-on services with credit cards, like rental car insurance, travel insurance, etc., which people do not even realize.
As you know your credit card transaction history, you can have a healthy financial status by making timely payments on your credit card dues. If you take responsibility for your credit card usage, you will maintain a good credit score and have better future opportunities.
You can also purchase costly items at EMIs that you can afford. You can repay that over three months to 3 years, depending on the bank’s allowance.
Another benefit of credit cards is that you can perform advance cash withdrawals from ATMs during emergencies.
You don’t have to worry if you are carrying a little cash with you when you have a credit card.
With your credit cards, you can pay your utility bills such as electricity bills, water bills, income tax, property tax, telephone bills, etc. By using your credit card, you will be able to pay your utility bills on time.

Drawbacks of credit cards:

Credit cards have several disadvantages, which are mentioned below.

. Credit card overcharge scam:

In the case of overcharge fraud, the victim gets an email or text message from the credit card scammer regarding an overcharge for a random product on his credit card. Then, the scammer requests the victim to reveal his/her credit card information if he/she wants a refund of the amount. For example, A gets an email from the cheater regarding his credit card being overcharged for an earphone. Then the cheater requests A to give his credit card information to repay the extra amount. But instead of repaying, uses his credit card details illicitly.

. Interest rate reduction fraud:

In interest rate reduction fraud, the victims get a call from fraudulent companies. These companies mention that they can reduce the interest rates on the victims' credit cards. They further claim that with their assistance, the victims can save themselves from being charged for more interests on their credit cards. In reality, these companies are fake, and there is no such scheme of interest reduction on credit cards. For example, B gets a call from a so-called company. That company says they can reduce B's credit card interests. Then B can save a lot on the interest applicable to his credit card. But the company tells B to give his credit card information. Excitedly B gives his details. Then once the company receives B's credit card details, B will be unable to manage his credit card. Since, the fraudulent company may use it for their expenses.

. Arrest phone call frauds:

In the arrest phone call fraud, the victim receives a phone call from someone claiming to be from a federal agency or some other government entity. That person mentions that the victim owes some money in the form of debts, fines, tickets, taxes, etc. The caller requests the victim to pay the money using a credit card. Otherwise, they threaten that their arrest warrant will be released, and the victim will be arrested. For example, A gets a call from a so-called government representative. The fake representative conveys to A that a fine has been imposed on him. He also mentions that he needs to pay money through a credit card. Otherwise, A will get arrested. Frightened by this threat, A pays the money. However, after a few days, A finds he has lost money on his credit card. After that, it clicks to him that the threatening call about his arrest was a scam.

. Donation frauds with credit cards:

In donation fraud, a fraudster from a fake charitable organization contacts the victim regarding a donation. He or she mentions to the victim that their organization supports people who have suffered losses from mishaps like floods, landslides, etc. Touched by these stories, the victim donates money to their so-called charitable organization. As soon as the fraudster receives the victim's donation, he or she is never seen again and nor is the money paid.

. Public Wi-fi credit card scams:

In the case of public wi-fi frauds, the victim uses a public wi-fi signal to make a purchase online by using his or her credit card. After that, the fraudster gains access to the victim's credit card through that public wi-fi signal and uses it for other illegal tasks.

. Card-not-existing scam:

In this scam, the cheater doesn't require a victim's credit card physically. Instead, he or she can use the details of the victim's credit card, like the account holder's name, credit card number, and the date of expiry. With these details, they can commit fraud via mail, text message, call, or online.