This includes regularly checking your purchase histories to make sure everything looks like it belongs. As a cardholder, you should do your part to avoid credit card fraud, too. While AI helps banks spot fraud before it becomes an issue, it doesn't catch everything. Issuers must walk the line between effectively screening for fraudulent transactions and providing a smooth user experience. At the same time, few cardholders would be very happy if they had to verify every purchase before it could be cleared. Fraud has a cost, both in money and in hassle. The hardest part for issuers when it comes to staying on top of fraud is often ensuring they don't get too many false positives. If you've ever gotten a text message from your bank asking about a given purchase, it was likely flagged as questionable by the bank's AI systems. In some cases, the transaction may be declined in others, you may simply be notified.
When something hits your account that the algorithms find odd, the transaction can be flagged for further analysis. And much of that comes down to comprehensive algorithms and artificial intelligence (AI) platforms.īasically, the issuer's algorithms know what kinds of purchases you typically make, how often you make them, and where (geographically) you typically shop. Issuers are getting pretty good at spotting what doesn't belong in your credit card purchases. For example, my cards are set to alert me about any purchases over $100 - which wouldn't do much to warn me about a $5 charge I didn't make. Moreover, many of the credit fraud alerts you can set for unauthorized purchases are typically for large expenses. What looks like a normal trip to your local big box store could really be fraud.
Unless you save every receipt or maintain a checkbook-style ledger (yes, checkbooks still exist) it's hard to keep track of every coffee and snack purchase. The key part of this strategy is that small charges are often overlooked, even by diligent cardholders who regularly check their accounts. But sometimes the small charges are the end game, with thieves using the "quantity over quality" approach to credit card fraud. Once the thief has confirmation that the card works, they start swiping like a madman. In some cases, a small - less than $5 - charge on stolen credit cards is used to just test the waters. More: Save while you pay off debt with one of these top-rated balance transfer credit cards Small charges can be easily overlooked Save: This credit card has one of the longest intro 0% interest periods around
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