You might not know it, but your credit card company is tracking your every move. Advances in how card providers and networks process massive amounts of data from card usage means they often alert consumers to potential fraud before consumers notice anything amiss.
That’s what happened to Ted Sindzinski, a digital marketer who lives in Orange County, Calif. A few months ago, out of the blue, his card provider called and asked him if he had recently made a purchase at the women’s retailer Anthropologie. He hadn’t. The company immediately shut down his card and denied several more online charges. “I was surprised when [the card provider] called me. I know card fraud can happen to anyone, but I didn’t think I’d have an issue given how diligent I am,” Sindzinski says. He still doesn’t know how or where the fraudster got his card number.
Banks are increasingly responding with that kind of aggression. While card providers and networks have long analyzed shoppers’ spending data to look for problems, they now have more automated systems in place as well as more sophisticated methods of sorting through data. And by the end of the year, consumers will start noticing an even newer technology that will almost completely shut down point-of-sale fraud.
[Read: 5 Things to Know About New Debit Card Fees.]
“[Card companies] look for patterns and search for anomalies,” says Kurt Helwig, president and CEO of the Electronic Funds Transfer Association. “If you typically use your card in the D.C. area, and then suddenly it’s being used in Eastern Europe, they’ll flag that. Or if you usually keep your spending under $1,000 a month, and then there’s suddenly a purchase for $6,000, it will raise flags,” he says. The card provider will then call the customer and ask him or her to verify the purchases.
Companies are often first alerted to problems from customers themselves, and the information can then be used to identify other instances of fraud. “As consumers recognize fraud on their accounts, they call in, and [card providers and networks] note that in their system, and then they’ll build a sort of heat map of all the areas where they are seeing consumers report fraud,” says Julie Conroy, a research director at Aite Group, a Boston-based research and advisory firm. After the card providers and networks identify hot spots, like a certain merchant that keeps coming up, then they will proactively notify customers, she explains.
Travel rewards credit cards are traditionally points based rewards programs where the rewards may be redeemed for cruises, airfare, gift cards, hotel stays, or anything else travel/entertainment related.
Many of these offers, especially the co-branded cards, come with additional perks where higher point values are given for purchases made at certain locations.
Things to look for in a travel rewards program are the earning structures, whether or not it has a sign-up bonus, and the rate information.
It is also extremely useful, especially for travel rewards cards, to read reviews of the offers as the common complaint with many programs is the difficulties that consumers encounter (sometimes) when trying to redeem their points or miles.
Because of this last part, if you have any experience with any of these travel rewards cards, both good and bad, that you share them with our community by writing a review of the offer.