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how to protect your credit card after a data breach

how to protect your credit card after a data breach

December 30, 2021
10 min read
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with advancing technology, most of our personal information has moved to the digital world, making us more vulnerable to cyber-attacks. a data breach is a type of cyber attack that can be defined as a security incident in which personal information is accessed without authorisation from the individual. such attacks may happen at an individual level through phishing emails, or at an organisational level, like the data breach at Equifax that exposed the personal information of thousands of individuals.
of course, this does not mean that you stop using online financial services. today, most companies are heavily investing in cybersecurity with data protection as their topmost concern. however, breaches do happen, and it is best to acquaint yourself with these easy steps to protect your credit and financial wellness in the case of a breach.

1. get information

if a credit organisation reports a data breach, the first step is to identify the information that was lost in the breach. generally, sensitive information can be divided into three categories:

  • least vulnerable, which includes names and addresses.
  • more sensitive, such as email addresses, date of birth, and card numbers.
  • most sensitive, such as PAN number, Aadhaar number, passport number, account numbers, passwords, etc.

while category one isn’t that harmful, the loss of your email ID or card information can lead to fraudulent charges. even the date of birth, once combined with your name, can be used to manipulate your financial accounts.

2. change your passwords
once you receive the information that an online account has been compromised, act swiftly and change all your passwords for financial accounts, as well as your email. create a strong, new password, and, if possible, use different passwords for different accounts. if you think you cannot remember so many passwords, you can always purchase a secure password management software to keep your data safe. it is also a good idea to use two-factor authentication to protect your accounts.

3. get in touch with your financial institutions
if you find that your card number has been stolen, immediately contact the relevant financial institution and explain the situation to them in detail. you must explain to them the risk of fraud, and ask them to alert you in case any suspicious activity is detected. it is also vital to get the card cancelled and have a new one issued immediately. 

4. review your bank statement regularly
most banks send automatic alerts each time there’s a transaction linked to your account. in case you have not subscribed for SMS or email alert service, do it immediately so that you are notified of any fraudulent transactions. you must also check your bank statement for any dubious charges and inform the bank immediately if you see any suspicious activity. remember, most banks only give you up to 48 hours to notify any fraudulent activity on your debit card – so being vigilant is the best way to protect your financial health.

5. protect your credit score
if your personal information is stolen, thieves can create new accounts in your name that may bring your credit score down. therefore, it is vital to inform the major credit reporting bureaus, such as CIBIL and Equifax, of the theft and ask them to place a fraud alert on your name. this way, if anyone tries to use your financial identity, say to get a new credit card, you will be instantly alerted and can prevent the fraud from happening.
you can also ask for a credit freeze or credit lock, to keep your credit score protected after a breach.
a credit freeze only allows specifically mentioned entities to look at your credit report during the freeze. as a result of this freeze, no thief can open any new account in your name as financial institutions cannot view your credit report, and will not agree to lend without this information.

final word

to get a credit freeze, contact the credit reporting companies in your area. once you share the necessary details, each company may charge you a small fee and then share a unique pin or password that you must keep safe. this pin can be used to lift the freeze when needed. many individuals prefer a credit lock over credit freeze, as a freeze can be expensive. besides, a freeze will delay your credit application if you are applying for credit yourself.  in case you are not sure about the theft and wish to take preventive measures, a credit lock will perform the same function of withholding your credit information from agencies but can be activated or deactivated online for free.
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