Why You Need to Check Your Bills Closely

Many consumers may receive their credit card bills every month and simply write a check for whatever amount they can afford to pay, without even glancing at the summary of all their monthly purchases.

But this is a bad idea, and a report from TIME Magazine highlights why: Consumers who take the time to carefully go through their monthly credit card bills—and bank statements—will be far more likely to discover any erroneous or even fraudulent charges made to their account. And the problem with this type of entry on a monthly bill is that, if it is the result of fraud, rather than a simple error, it can be very difficult to spot.

The days of thieves gaining access to a credit card or bank account number and maxing it out are largely over, as criminals have become smarter about ripping off their identity theft victims, the report said. Instead of stealing thousands of dollars at a time, many might simply try to get away with making smaller charges. Usually, these can be as small as $2 to $10, and benefit the thief because they likely have access to a number of compromised accounts and can draw small amounts from each, rather than large sums from one.

And in many cases, even when consumers do notice a transaction on their account they don’t recognize, they won’t bother to dispute it if it’s for a sum that small, the report said. But not doing so can really make the stolen amount add up quickly, meaning that borrowers might end up being victimized more than they would have if their card had simply been maxed out in one fraudulent purchase.

Experts recommend that consumers dispute every purchase they don’t recognize on their monthly credit card bills and bank statements not only because it will save them money, but it can also protect their credit. A major portion of a consumer’s credit score is made up of the amount of debt being carried versus their total account maximums, meaning that every little bit added to their balances can end up being problematic if it’s not paid off. Obviously, fraudulent purchases can make it harder to pay down a credit card bill, particularly if they’re allowed to add up.