One of my business cards had an unauthorized purchase. The credit card company noticed it and called me. I asked the person who called how this happens. It said these people have software that continues to roll numbers until one works.

My attitude today is that no price is too high ... So you can guess that I'm bitten, not just shy.

Unfortunately, monthly or better monitoring of your credit reports is the only way to detect certain identity theft techniques. Freezes aren't binding on creditors. You can monitor your accounts 24-7 for unauthorized charges, and you will always miss unauthorized accounts. It doesn't matter who calls you to check on suspicious activity if you're not the one receiving your calls. Etc. Identity theft is not just some guy with a stolen credit card anymore. It stinks, its unfair, but its reality.

Despite the constant barrage of articles concerning identity theft, it's actually a very rare crime. Only about 1.5 percent of all Americans fall victim to true identity theft, and half of those are victimized by family members or friends! We are far more likely to be burglarized or robbed.

I think it's important to distinquish between identity theft and the theft or misuse of a credit card. I recently had a new credit card -- which was erroneously sent to my home rather than my UPS Store box -- stolen from my mail box. The thief ran around town and charged up $1800. The bank quickly and easily resolved the problem with no expense for me. But that was NOT identity theft.

It's important to understand the difference because if you buy "identity theft" insurance you probably will NOT be covered for anything else (such as someone gaining access to your bank account or Paypal account and cleaning it out!).

Also, most credit card fraud actually doesn't end up costing the victim any money (although it may cause a lot of anquish). Banks usually don't even bother charging the $50 limit they are allowed to charge. So what are you actually insuring against?

As for the credit reporting -- all that does is alert you after the fact that something is wrong. It doesn't prevent it. And don't forget, we are all entitled to a free annual report from each of the three credit reporting companies.

I like the advice giving by Gregory Karp in his "Living Rich by Spending Smart" book (excellent tips, by the way!). He says to request ONE report (from one of the three) every four months. Since they all report pretty much the same stuff, you'll get free reports every four months.

For me, I'll skip the "insurance" and other fear-driven tactics and just use the money to pay for my private mail box and good dead bolt locks on my house!

I ballance my check book weekly and get credit reports every six months (about). I don't have any special sort of security, but I find that being aware of my expenditures works just fine. When there's been a problem on my credit report, I simply write a letter with some documentation to the company that issued it and I is usually off very quickly (they only have 30 days to fix it by law). So far, no problems *grin*.

-Suz

You can report the merchant who violates the agreement to VISA. They probably won't do anything about one complaint, but if VISA receives many complaints they can simply tell the merchant they aren't allowed to process card transactions. That is very effective because if the merchant violates that, they won't get paid from VISA for any card transactions, and it also means it won't show up on your bill. It's like it didn't happen, but you still have the goods.