Credit Card Information Possibly Compromised at Internet Retailer Monoprice - How to Protect Yourself Against Fraud

The internet retailer Monoprice recently disclosed on its website that some customers had reported their credit card information had been misused. Monoprice is currently investigating this, and in the mean time they have suspended taking credit card payments. Monoprice is a popular internet retailer of cables, components and accessories for computer and consumer electronics.

Several Fatwallet members who have shopped at Monoprice have reported suspicious credit card charges in this FW thread. There were also several recommendations in this thread about how you can protect yourself from these incidents. I've reviewed several of them below. Each has some pros and cons to consider.

Use credit cards instead of debit cards on the web

The main issue with debit cards is that money is debited from your checking account, and then you have to work to get it back if it's a fraudulent purchase. There are protections for fraudulent debit card use, but they are typically not as good as compared to credit cards. According to the FDIC Consumer News:

[Debit cards] are considered less beneficial than credit cards for major purchases or buying items online because of the more limited protections in cases of unauthorized transactions or disputes.

I have more discussion about debit card protections in this post.

Use a credit card that offers virtual credit card numbers

This PC World article has a good review of virtual credit cards. According to the article:

If you have a credit card (not a debit card) from Bank of America, Citibank, or Discover, or if you use PayPal, you already have free access to the feature. A new online service called Shop Shield also provides various levels of protection.

Use PayPal or Google Checkout for internet purchases

These services allow you to make purchases at websites without disclosing your credit card info to the online retailers. However, it should be noted that many people have reported issues with PayPal such as accounts being frozen.

Sign up for credit monitoring services

I'm not sure how this will help with unauthorized credit card purchases. If more than just your credit card info is stolen, these services may help a little. However, according to Clark Howard, a credit card freeze is much more effective and less costly. Some banks such as MetLife Bank offer free services to help protect you against identity theft.

Regularly review your credit card accounts

Credit cards already have many fraud protections in place. You just have to regularly review your accounts for unauthorized purchases. If you find any, you can then begin the dispute process. If you have trouble regularly reviewing your accounts, you may want to consider services like Mint.com (see my review).

Do you have any tips to protect against credit card or debit card fraud? Please leave a comment if you have any suggestions or insights.