Wise credit tips for your Christmas shopping

'Tis the season to go shopping but before your gather up your plastic and rush off to the shopping malls both real and virtual, it is wise to take a few simple precautions to protection yourself from card fraud.

Unfortunately, the UK is now the card fraud hotspot of Europe, with around one in five of us having been a victim of card fraud, according to research from the European Security Transport Association. The association found that we are twice as likely to be a victim of card fraud than those living in the seven main countries in Continental Europe. Around 19% of us, or 7 million, have been a victim of some kind of card fraud against 11% in mainland European countries. A study by the European Commission also found that a third of card fraud victims are not reimbursed by their card issuer for their loss.

Considering we are expected to be spending £7 billion online in the run up to Christmas and billions more offline, taking care of your credits cards is a top priority.

While the introduction of Chip and PIN, where you use four numbers instead of your signature last February, has cut some types of card fraud, others have continued to flourish. Overall card fraud fell by 5% in the first six months of 2006 to £209.3 million, according to APACs, the UKs payment association, but there are still some hot spots and these are the danger zones.

One area of fraud that has been growing, although at a slower rate is card-not-present fraud, which includes shopping online, phone and mail order. This went up by 5% in the 12 months to June 2006 against 29% between 2004 and 2005.

It involves crooks stealing your card and and using it to buy goods over the internet or phone using the numbers on the card. However, this type of fraud could soon be stamped out as there are several initiatives in place to prevent it such as the addition of address vertification and card security code systems. Some credit card companies, such as Visa and MasterCard, have also introduced a password system adding another layer of security.

The banking industry is about to launch a hand-held card reader that you will be able to use in your home while shopping online and by phone. Just like in a shop, you would key in your PIN into the reader at purchase.

Counterfeit card fraud is another popular sport for crooks. They copy the magnetic stripe details on your card and use cameras at cash machines to capture your PIN. They then use the fake cards at cash machines and at retailers that have not upgraded to chip and PIN. Similar to card-not-present fraud, criminals can expect a short-lived career from this scam as all cash machines and tills at retailers are in the process of being upgraded.