Credit card scammers are excited for the next Fed rate cut. Here’s how to keep yourself safe

It takes a certain level of creativity to keep coming up with ways to scam people out of their credit card information. Unfortunately, scammers seem to be a highly creative bunch.

With the Federal Reserve likely to start lowering interest rates soon, scammers might try to capitalize. Some of their “offers” will sound very appealing. And like all things that are too good to be true, they can be highly tempting to fall for.

To avoid the chaos that credit card fraud can wreak on your financial life, you want to be vigilant — and informed. I recently talked with Michael Bruemmer, vice president of Experian Data Breach Resolution and Consumer Protection, to talk about credit card scams to be aware of right now. Here’s how you can recognize them (and what to do if you haven’t).

Common credit card scams today

1. Interest rate reduction

One of the biggest scams happening today is the interest rate reduction scam, Bruemmer says. In this one, a scammer gets in touch with you and promises to lower the interest rate on your mortgage, credit card or other type of loan. In return, you need to “pay with your credit card or put your deposit down on your credit card.” Your card information is what the scammer is really after.

So, next time a third-party company calls you to lower your card interest rate, or an “underwriter” contacts you to refinance your mortgage at attractive terms for a fee, feel free to hang up your phone. In the best case scenario, you’ll simply waste a lot of money. Worse, scammers might also use your credit card information to make fraudulent purchases.

Remember, there’s nothing a third-party company can do for you that you can’t do for yourself. Call your lender or issuer directly to learn what your options are. 

2. Student loan scams

Another prevalent scam designed to cheat you out of your credit card number has to do with student loans. In this case, a company reaches out to you offering a way to reduce or forgive your student loan debt. However, to take advantage of this offer, you need to provide your credit card or bank account information.

“All they’re trying to do is get your credit card number and use it someplace else,” Bruemmer says.

According to the Federal Student Aid website, this type of scammer tends to use pressure tactics and claim the positive result is guaranteed. They might tell you the offer or program is only available for a limited time and even promise immediate student loan forgiveness. All of it is just a tactic to get you to sign up — with your payment information that’ll be used for identity fraud.

3. Grandparent scam

Scams targeting people aged 60 and older caused over $3.4 billion in losses in 2023, according to the Federal Bureau of Investigation. This is about 11 percent up from 2022, and victims of elder fraud lost $33,915 on average as a result of these crimes in 2023. 

The grandparent scam is one such crime, and like most of them, it’s outright diabolical. 

As Bruemmer explains, a scammer contacts a grandparent and says something like, “Hey, your grandson [or] granddaughter who’s vacationing… has been impounded by the police, arrested. You give us a credit card number, we can ensure they get out of jail.” 

Such a situation creates a sense of urgency and an emotional response. It’s scary to imagine a loved one in jail far from home. It’s no wonder this strategy is popular among scammers as a way to steal credit card information.

4. Charity scams

Another way for scammers to prey on people’s kindness is charity scams. Every time there’s a natural disaster such as a fire, flood or another weather event, fraudsters create websites where you can put in your credit card information to make a donation, Bruemmer says. 

“Generally, it is a fake of a reputable site,” he says. For example, you might think you’re on the Red Cross website, but instead of redcross.org, it’s redcross.com, redcross.net or a different variation designed to lead you to believe you’re donating to Red Cross. In reality, of course, you’re giving your credit card information to a scammer. Be sure to closely examine website addresses, or URLs, to be sure the site you’re on is legitimate before making a donation.

5. Online shopping

Online shopping scams come in many flavors. The Federal Deposit Insurance Corporation lists variations like fake websites mimicking legitimate retailer sites, fake apps that contain malware and links in unsolicited promotional emails. And, with the rise of shopping through social media platforms, scammers have established their presence there as well.

While the fraudulent websites might appear convincing, the deals you’ll find on them often aren’t. The prices are unbelievably low, the discounts are outrageous and the offers are too hard to pass up. All these should raise red flags for you.

“If the deal’s too good to be true… don’t put in your credit card,” Bruemmer says.

What to do if you’ve been scammed

Unfortunately, scammers are quite good at what they do. They take advantage of human nature, after all: your financial vulnerabilities, your empathy, the good old love of a bargain.

If you realize you’ve been scammed, here are some steps you should take:

1. Be aware. Assess the damage and evaluate where it’s spread. Read your financial statements and check your credit reports for any accounts that don’t belong there.
2. Act quickly. The sooner you stop the bleeding, the sooner your finances will recover.
3. Get in touch with your financial institutions. Report any fraudulent activity on your accounts and replace compromised credit cards.
4. Freeze your credit file. While you’re dealing with the damage the scammers have done, a credit freeze can help keep your credit file safe. It prohibits anyone from accessing your credit report, meaning a fraudster won’t be able to open an account in your name because the creditor will be unable to run a credit check.
5. Protect your financial accounts. Change your passwords and turn on two-factor authentication. This way, even if someone gets your login information, they still won’t access your account without a biometric thumbprint, a facial scan or other type of verification.
6. File a police report. The process may vary depending on where you live — some police departments will let you file online, and others can require that you submit a paper report in person.

The bottom line

“Understand that people are going to be scamming you all the time,” Bruemmer warns. Stay vigilant and pause before you click any links. If something seems plausible but you’re still suspicious, go to the source directly. For instance, if someone claims they can help you with your student loan, call your loan servicer. If a company promises to lower your credit card bill, call your card issuer. Or, if a deal sounds a little too good, check if the merchant — or its website — is legitimate. After all, the best way to deal with a scam is to not fall for it in the first place.