What is a credit card data breach?

A credit card data breach occurs when personal credit card data is exposed to an unauthorized individual. The data may include the card owner's name and address, the card number, expiration date, and verification code (CVV). Breaches can occur accidentally, or thieves may intentionally steal credit card information to commit identity theft, make potential unauthorized purchases or open a new line of credit in someone else's name.

Having your data compromised in a breach may be nerve-wracking but knowing what to do if you find yourself in this situation could help minimize damage to a minimum.

How does a data breach work?

Credit card data breaches involve the exposure of confidential data, but they can happen in any number of different ways.

In some cases, a data breach may be entirely accidental. A company's data protection measures could fail, exposing users' credit card information to the public (including potential criminals who want to take advantage of it).

Hackers and identity thieves use unscrupulous methods to access private information as well. In small-scale data breaches, they may get access to someone's physical credit card and use it to make purchases. Alternatively, they may use a credit card skimmer — a piece of technology that can record credit card information when people swipe their cards at a machine — to capture credit card details. 

Large-scale credit card breaches happen when criminals use nefarious tactics like phishing, SQL injections (installing malicious code on a web app), or fake web applications/text messages to obtain credit card information. These tactics give criminals access to their target's websites or applications, potentially allowing them to access a lot of information all at once.

What happens during a data breach?

Depending on the situation, the user may be the first to realize something is wrong after spotting unfamiliar purchases on their credit card statement, in which case they should immediately contact their credit card issuer.

Credit card companies also have a number of security measures in place to help monitor for suspicious activity and credit card theft. Fraud monitoring allows credit card companies to watch for suspicious transactions and may reach out to customers for verification. 

In large-scale credit card data breaches, companies are required to inform customers that their information was compromised. In such situations, they will typically provide further context around what caused the breach and what information was accessed, and they'll advise customers about what actions they should take. This may include reviewing statements for unauthorized purchases or changing compromised passwords.

Ways to prevent a credit card data breach

You can never be too careful with your credit card information. There are several actions you may consider taking to reduce the chances of having your information compromised in a breach — or used fraudulently in the event it is.

Secure and update passwords

One way criminals gain access to your credit card information is through a weak password. Using the same password for many different sites and services puts you at risk, as do simple passwords that are easy to guess, like “password123" or your pet's name.

Consider using unique and secure passwords for every site you use and updating your passwords frequently.

Use two-factor authentication logins

Many online companies allow you to set up two-factor authentication. For example, a company may send you a code via a text message when you are trying to log in or ask you to verify a security question alongside your password to gain access.

This extra layer of protection may help prevent credit card breaches in the future.

Freezing your credit

If you lose a credit card at any point, the credit card issuer can freeze the account. This will help prevent anyone who may have stolen your card from using it to make unauthorized purchases.

Disposing of unused credit cards and personal information

If a credit card expires or you've stopped using it altogether, destroy the physical card before disposing of it. You can do this by cutting it up into small pieces and putting them in the waste bin.

If you have a piece of mail or a printout with your Social Security number, credit card information, or any other identifying factors, a shredder may come in handy to help destroy any personal documents before anyone can find them and use them for future unauthorized purchases.

Know the signs of a scam

Criminals attempt to steal your information in a variety of ways, so knowing the warning signs is a good way to protect yourself. Never click on a link sent to you via email or text message unless you know who sent it, and you know the person or company that sent it did so intentionally. 

Remember, if someone else has fallen victim to identity theft, criminals may use their identity to gain your trust and get your information as well. So, if someone you know sends you a random message on social media or via text asking you to click a link, you may want to refrain from clicking until you've verified that the person sending you the link is who you think it is.

Ask your credit card provider about security measures

Your credit card company most likely has methods in place to protect your information, but there may be additional security measures they offer that you may not be using. You can find out more by visiting their website or calling their customer service line and asking about what you can do to further protect your credit card information.

Take it seriously

If you have been informed that your credit card information has been compromised, you may want to review your credit card statements for unfamiliar purchases. You may also want to change the passwords on any accounts associated with the breach (even if you don't see anything strange on your statements).

In summary

Getting caught up in a data breach can be frustrating to say the least, but there are things that might help prevent this situation. When you know the warning signs and if you suspect your credit card data has been breached, there are steps you can take to help protect your personal information and your money.