But the truth is, credit fraud affects us all. When criminals obtain goods or cash through credit fraud, it is the credit card issuer that bears the burden of the loss-a cost it covers by charging its cardholders higher fees and interest rates.

Credit Fraud Poses a Growing Problem
Law enforcement officials and consumer protection organizations such as the Public Interest Research Group and Privacy Rights Clearinghouse all report that credit fraud is on the rise-especially in one of its most insidious forms: identity theft.

There are several different kinds of credit fraud, and some of the most threatening involve much more than a stolen credit card. A lost or stolen card may be what we think of first when we think of someone using our credit-a fraud we know we can halt by reporting the card lost or stolen.

But what if someone were using your credit while your card sat safely in your pocket or purse?

Credit Fraud Can Occur without the Victim's Knowledge
A stolen account number can often be just as effective for a criminal as a stolen credit card, especially if information such as the expiration date or your billing address is also available to him or her. You may not know someone is using your account until you notice charges or cash advances you did not make on your monthly statement.

Criminals can steal credit account numbers in many different ways, such as collecting them in telephone or Internet scams, copying them from credit cards when the owner isn't looking, or gathering them from discarded receipts or account statements in people's trash.

Gathering information from people's trash, also known as "dumpster diving," is also effective for criminals intending to perpetrate the even more hard-to-catch identity fraud.

"Identity theft" describes when someone uses your personal information, such as your name and Social Security number, to either take over current credit accounts or open new ones using your identity. An identity thief might also rent an apartment, take a job, or even commit crimes using your name, but the identity fraud generally involves using your good credit rating without your knowledge.

Tactics for stealing your identity include stealing personal information and then using it to apply for credit or, sometimes, stealing preapproved credit card offers from your trash and sending them in with a change of address.

A clever identity thief can use your name and information for months without your knowledge, sometimes making the minimum payments on any accounts s/he opens so as to keep that credit line available longer. You might not find out what is happening until s/he uses the credit to its maximum limit and then stops paying, causing the creditor to send collectors out to find you to settle the debt.

Checking your credit report regularly is one of the few ways to catch identity theft before it goes that far. Just as reviewing your credit card statement can reveal charges you did not make, reviewing your credit report can reveal activity on accounts you don't use or new accounts you did not open, alerting you to the possibility of identity theft.

Take Steps to Protect Yourself and Minimize the Costs of Credit Fraud

• Safeguard your credit cards just as you would cash.
• Reduce the number of cards you carry; just one or two are sufficient for everyday use.
• Minimize the amount of personal information a criminal can steal. Don't carry your Social Security card, birth certificate or passport with you on a routine basis.
• Keep a list of all of your credit cards, including account numbers, expiration dates, and issuer phone numbers, so that you can notify creditors quickly in case of theft or loss.
• Sign any new cards as soon as you receive them.
• If one of your credit card bills is late, call the card issuer's customer service number immediately. Make sure that your bill has not been diverted to a different address.
• Review your statements carefully each month to make sure all charges are accurate.
• Report billing errors and lost or stolen cards to your credit card issuer immediately.
• Never give anyone a card number or other personal information over the telephone unless you initiated the call.
• Shred preapproved credit card offers, credit card receipts, copies of airline tickets, travel itineraries, and anything else that displays your credit card information before putting them in the trash.
• Check your credit report for accuracy at least once a year.