Understanding how credit card scams work is a first step toward protecting yourself against this type of fraud. Here are some common examples, so that you know what to look out for.

Synthetic identity scams

A synthetic identity is a combination of real and fake information, says the National Credit Union Administration (NCUA). A common example is when a scammer uses a stolen Social Security Number (SSN) alongside a fake address, birth date or name. Together these create an entirely fake identity. The reason scammers use real and fake information is so they can apply for credit and create financial history that appears legitimate.

Synthetic identity can harm a victim's credit, according to the NCUA. Say a scammer takes out a loan using a real Social Security number (SSN) then doesn't make payments on the loan. Missed payments can affect the real owner of the SSN even if the name attached to their SSN is fake. Be on the lookout for incoming mail with someone else's name on it sent to your home.

Credit card interest rate reduction scams

Telemarketers promising lower interest rates for a fee are often scams, warns the Federal Trade Commission (FTC). Scammers may also attempt to convince victims that they have special connections with major banks, and that the savings will help pay off debt faster. They may even promise money-back guarantees.

However, the FTC's Telemarketing Sales Rule (TSR) prohibits companies from collecting fees before settling clients' debts. The FTC advises consumers to call the bank directly to settle debts. Credit cards typically have a customer support number on the back. If you get a rate-reduction call, your best bet is to hang up.

Phishing scams

A phishing scam is a type of wire fraud where scammers pretend to be a reputable business, according to the FTC. They target people through text, email or phone. They may convince victims of suspicious activity on their account or payment issues in an effort to steal credit card numbers or SSNs.

Scammers often disguise themselves as legitimate businesses or websites by changing a single letter, symbol or number, says the Federal Bureau of Investigation (FBI). For instance, it might be an email from a business you've made purchases from in the past, but a closer look will reveal that the name is misspelled, or their logo is slightly off.

If you think you may've clicked on a phishing link, the FTC recommends updating your security software and running a scan.

Spyware

Spyware is a software program that allows criminals to secretly monitor a victim's computer, according to the National Institute of Standards and Technology (NIST). It can secretly record what the victim types, websites they visit and their private chats. Criminals can use spyware to obtain sensitive information like passwords, personal identification numbers (PINs) and credit/debit card numbers.

Carnegie Mellon University's (CMU) Information Security Office explains that spyware attacks can lead to identity theft. Spyware may redirect victims to fraudulent sites, giving criminals even more control over their computers, where important credit card and banking information might be stored. Signs your device is infected with spyware include slow system performance, programs crashing, frequent pop-ups, strange desktop icons and browser function keys not working properly.

Spyware can be difficult to get rid of once installed, according to the Federal Deposit Insurance Corporation (FDIC). If you fall victim to spyware, the Cybersecurity & Infrastructure Security Agency (CISA) recommends running a full scan on your computer with anti-virus software. If your anti-virus software only finds spyware, but doesn’t remove it, you should consider getting a legitimate software product to remove the spyware, the CISA adds.