[youtube https://www.youtube.com/watch?v=ySOpyYdB8fo]Using a credit card for purchases is often convenient, but it does bring with it some risks. Fraud is on the rise, and virtually everyone is at risk to some degree. If it hasn’t already happened to you, you probably know someone who has experienced it.

So what can you do? Well, there are several options you can pursue to help minimize this risk. All of them have both plusses and minuses, so it is important to think them all through.

  1. First, there are credit monitoring services. These services tend to be heavily advertised and are relatively inexpensive. While this may seem great, they typically don’t prevent theft all that well, just notify you after the fact. You can actually monitor your own credit with several free web-based services that have been made available in recent years, or you can just keep an eye out for fraud on each of your accounts individually.
  2. The second option is to utilize a fraud alert in an attempt to slow down crooks. This method causes any attempt at opening a credit account to be met with extra steps to make sure it is actually you. This method is fast and free to setup, but the drawback is that it doesn’t technically prevent fraudulent access to your credit; it only slows it down.
  3. The third and most effective method to preventing credit card fraud is using a credit freeze. What this essentially does is freeze your credit file so that nobody, including yourself, can open credit in your name. The drawbacks to this is that depending on where you live and your history of identity theft, you may have to pay a fee to initiate and remove a credit freeze. In addition, it only prevents new credit fraud; it does nothing to keep people from stealing your current credit information.

Bottom line, the second option is probably best for most people, as monitoring your own credit with the addition of a fraud alert should help you stay on top of most situations. But if you’ve already been a victim in the past, a credit freeze may be the best solution for you.