Prevent Holiday Credit Theft

Many consumers are already warming up their credit cards ahead of Friday's unofficial launch of the holiday shopping season. Are you being careful enough with your credit AND with your privacy? Ray Hennessey, editor of SmartMoney.com, offers some help.

Following Black Friday, many shoppers hit the internet for Cyber Monday - the first Monday after Thanksgiving - and complete some of their holiday shopping online from work. "It's the more dangerous time because your using your credit card and your using the internet," Hennessey says. "It's a more secure world than a few years ago, but there are some things you can do to make sure it's even more secure."

Hennessey recommends only using websites of merchants you know and trust. These are the sites that have the more secure sites. And while you are visiting these larger sites, consolidate your purchases. "If you're going to go to a place like Amazon, do as much as your shopping in one thing so you are just dealing with one charge on your bill instead of multiple charges," he suggests. And immediately check receipts against your bank statements. The quicker you find problems, the sooner they can be fixed.

If you think you are a victim of identity theft, it might be a good idea to freeze your credit reports. Twenty states allow you to freeze your report, allowing you to essentially lock down your credit report, so that no one can access them without your permission. But there are some drawbacks to this process, including no instant credit. "A lot of us kind of thrive on that this year, for better or worse," Hennessey explains. It also costs money to unfreeze your credit report and there are loopholes for landlords and employers which could still lead to credit fraud.

Hennessey also warns you should not fall prey to the store credit cards that offer a discount for applying. Too many and you can decrease your credit score. It's better to have one main credit card you use for everything.

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by Jenn Eaker