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Credit Card Skimmers: How They Work and Tips for Avoiding Them

Credit Card Skimmers: How They Work and Tips for Avoiding Them
Jason Steele

Jason Steele

Updated March 16, 2022
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Editor’s note: Lantern by SoFi seeks to provide content that is objective, independent and accurate. Writers are separate from our business operation and do not receive direct compensation from advertisers or partners. Read more about our Editorial Guidelines and How We Make Money.
Credit card skimmers are devices that are added to card readers to allow the theft of credit card data. They can come in several forms, but they all try to appear like legitimate credit card terminals, tricking customers into using them. This allows criminals to steal your credit card information. Like other credit card scams, it can be difficult to stop credit card skimming, but there are ways to help prevent it. Read on to learn how to spot a credit card skimmer and tips to avoid getting skimmed.

What Is a Credit Card Skimmer?

Credit card skimmers are devices that thieves attach to payment terminals (such as ATMs or gas pumps) to steal card information during a payment transaction.Skimmers can come in several forms, given how credit card payments work. Some skimmers are devices that are physically attached to the payment machine to capture information as you slide in the card to pay. Or, a skimmer may be in the form of a fake keypad. Other forms of physical skimmer devices are “card shimming” devices, which are thin paper strips hidden inside the card slot that clone the magnetic stripe on the card. Some kinds of skimmers may not be physically attached to the payment machine. Hidden cameras can capture your card information, such as your PIN, in order to steal your card information for future use.

How Does a Credit Card Skimmer Work?

A credit card skimmer reads the magnetic stripe on your credit or debit card when you use it to pay at a card reader. The skimmer then stores the card number, expiration date, and cardholder's name.

What Happens When Your Card Is Skimmed?

After your card is skimmed, hackers usually use the stolen card data to make purchases, sell your data, or create counterfeit cards. Skimmed data is often transmitted to other countries or used to make purchases over the phone or online. Debit cards can also be skimmed. If your debit card was skimmed, then your personal identification number (PIN) might have been stolen as well. That’s because a fake keypad may have been installed over the real keypad, or a camera could have captured your PIN number when you entered it.

How to Identify a Skimmer

Skimmers can be hard to identify, but it’s sometimes possible to spot a skimmer with a visual and physical inspection, especially at locations like ATMs and gas pumps. Here’s what to look for when checking for a credit card skimmer:
  • Look for alignment issues between the card reader and the panel under it. Since skimmers are often placed on top of the card reader, it may stick out at an odd angle. There may also be security tape or stickers that can look ripped or broken.
  • Feel for any loose sections of the card reader or keyboard. Even if you can’t physically see that something is off, you may be able to feel any loose sections of the card reader or keypad. Card readers should not be able to move around, and buttons on ATM keypads shouldn’t be too hard to push. 
If you see or feel that something is off, don’t use that machine. 

Tips to Prevent Being Skimmed

To prevent being skimmed, it’s important to be proactive before using your card and have a clear understanding of how credit cards work. The best ways to avoid being skimmed generally include remaining aware and mindful.

1. Scan Briefly Before Using Your Card

Before you use your card at a machine, look around for signs of tampering. Potential signs can include loose, crooked or damaged card readers, broken tape, graphics that aren’t aligned, or mismatched machine parts. If you see any of these, avoid this machine. You can compare the machine to another nearby machine to look for differences. 

2. Be Mindful of Non-Bank ATMs

Since bank ATMs are often located within a bank with security cameras or in more secure locations, they may be less likely to have been tampered with. Try to avoid using non-bank ATMs whenever possible, especially ones that are located inside convenience stores or bars that have high foot traffic but little security measures. 

3. Check and Recheck the Keypad

If the keypads on a card reader are too hard to push, it may be a sign of tampering. Check in and around the keypad for loose, missing, thick, or tough buttons.  

4. Conceal Your PIN

When entering your PIN into an ATM, cover your fingers and the screen with your body or your other hand. This can help to block potential cameras or eyes from seeing your number. Also never say your PIN out loud.

5. Remain in Public View

Machines that are in public view may be less likely to have been tampered with, since criminals may have fewer chances to install skimming devices. As such, consider sticking to using machines that are in public view whenever possible.

6. Sign Up for Credit and Debt Alerts

Most card providers have some sort of fraud alert system. Even though alerts won’t actually prevent your card from being fraudulently used, if you can catch the issue immediately, it can help prevent the criminal from continuing to use your card. And, when possible, use a credit card instead of a debit card. Fraudulent charges on a credit card are often easier to dispute than charges on a debit card.

7. Trust Your Instincts

If you feel like something is off, use a different machine or payment method. Sometimes you may not be able to identify a single clue that there’s a skimmer, but the overall feel of the device may give it away. 

8. Check Your Account Regularly

Checking your account frequently can help you to identify suspicious purchases right away, rather than waiting until the monthly statement posts (though it’s important to be aware of credit card statement details, too). If you see a purchase that you didn't make, call your bank immediately.

What to Do If Your Card Is Skimmed

If you suspect that your card has been compromised, contact your card issuer or financial institution as soon as possible by calling the number on the back of your card. In some cases, your card issuer may contact you if they spot any activity that seems suspicious. They’ll likely shut down your card, and you may need to cancel your card and get a new one if it’s been compromised.If you’ve spotted one charge that seems fraudulent, you’ll want to see if there are any others. Check your bank statements to look for any further fraudulent charges, and make sure to report these to your card issuer or financial institution as well. It’s also important to review your credit reports to see if there have been any impacts there.You should also contact the business where you believe the skimming may have occurred so they are aware and can potentially prevent this from happening to more people. Also contact your local law enforcement agency, the consumer division of your state attorney general's office, and the Federal Trade Commission. Again, this can potentially prevent the skimming from continuing.

Can You Get a Refund if Your Card Gets Skimmed?

Generally, you can get a refund if your credit card gets skimmed. You should look at your credit card terms to see how your card handles fraudulent charges. Your bank or card issuer can inform you about refund options if your card gets skimmed. Typically, the money will get refunded to your account and then a new credit card will be mailed to you since the other card has been compromised. Many top credit cards have zero-liability policies, which means you won’t be liable for any of the amount of the fraudulent charge. Even if your card issuer doesn’t have this policy, per federal law, your maximum liability for fraudulent use of your credit card is $50. Keep in mind that policies for debit cards may differ.

The Takeaway

Unfortunately, credit card skimming can happen. However, now that you know what a credit card skimmer is, there are steps you can take to prevent a thief from stealing your information during a payment transaction. This includes checking your surroundings, being selective about which ATMs you use, checking the card readers you use, and keeping tabs on your account.It can also help to have a credit card with added security features. Contactless credit cards, for instance, can be safer from skimming since you’re not inserting the card into the reader. Lantern by SoFi can help you to compare credit cards to find the one that is right for you. We lay out the credit card requirements so you can assess which card may be a fit.
Photo credit: iStock/Wiphop Sathawirawong The tips provided on this website are of a general nature and do not take into account your specific objectives, financial situation, and needs. You should always consider their appropriateness given your own circumstances.SOLC1221046

Frequently Asked Questions

What does a credit card skimmer do?
Is it possible to skim a credit card?
Are credit card skimmers illegal?
How can you detect a credit card skimmer?

About the Author

Jason Steele

Jason Steele

Jason Steele has been writing about credit cards and award travel since 2008. One of the nation's leading experts in this field, he has contributed to dozens of personal finance and travel outlets and has been widely quoted in the mainstream media.
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