Definition

• Credit card fraud refers to the use of a credit card by someone other than its rightful owner or an authorized buyer on the account. Identity theft means pretending to be another person and using that individual's personal information to get credit and identifying documents like a driver's license, according to the Federal Trade Commission.
  
  

Purpose

• Credit card fraud has the short-term purpose of using as much of the victim's credit line as possible to rack up purchases. Identity theft gives criminals a long-term payoff. They open as many accounts as possible in someone else's name and use them as long as possible. They simply open new accounts when the old ones are closed for delinquency and repeat the process until the real person's credit rating is destroyed. Identity thieves also rent apartments and get utility service in their victims' names, the FTC warns.
  
  

Effects

• Both credit card fraud and identity theft have harmful effects on victims. Consumers who try to use compromised cards are declined and must go through the trouble of reporting the problem to the card issuer and credit bureaus. They must change any automatic monthly payments that were being made on the stolen card. Identity theft victims have to monitor their credit reports diligently, and the FTC advises they maintain long-term fraud alerts or freeze their credit to keep thieves from getting new cards and loans with their information. Fraud alerts and freezes make it more difficult for thieves to open legitimate accounts.
  
  

Time Frame

• Credit card fraud is often detected more quickly than identity theft because criminals quickly buy as many things as possible to get as much as they can before the missing card is reported. Consumers find out when a purchase is declined or strange charges appear on their online or paper statement. Identity thieves open accounts with a person's information and have the credit cards and bills sent to a different address. They often use the cards for several months until the accounts are closed for non-payment. The victim only finds out through being turned down for legitimate loans or calls from bill collectors for unknown accounts, according to the FTC.
  
  

Prevention

• Both credit card fraud and identity theft can be prevented through careful guarding of personal information. Watch cashiers, restaurant servers or anyone else who handles credit cards, the Privacy Rights Clearinghouse recommends, then put your credit cards away promptly when a transaction is done. Only shop online through known merchants with secure websites. Carry identification and credit cards carefully in a wallet or purse. Refuse to give personal or financial information out over the telephone or through emails. Check credit card statements carefully, and shred financial documents before disposal. Review credit reports regularly with free annual copies from AnnualCreditReport, the FTC advises.