Three Simple Steps to Protect Your Finances Online (That Most People Skip)

We all know we should protect our finances, but knowing what to do and actually doing it are two different things. The reality? Most Americans are leaving themselves wide open to fraud, and it's costing them dearly.

In 2024 alone, nearly 450,000 cases of credit card fraud were reported to the FTC. Americans lost over $12.5 billion to scams—a staggering 25% increase from the previous year. Even more alarming? Most unauthorized transactions involved cards that weren't even lost or physically stolen.

The good news is that protecting yourself doesn't require a computer science degree or hours of your time. Let me walk you through three essential steps that can dramatically reduce your risk of becoming another statistic.

1. Use Credit Cards Online—Not Debit Cards

Here's a scenario that plays out thousands of times daily: You're shopping online, ready to checkout, and you pull out your debit card because it's quick and easy. Stop right there.

The Critical Difference

When fraud happens with a debit card, that's your actual money being drained from your checking account. When it happens with a credit card, it's the bank's money—and they're highly motivated to get it back.

Real-World Example: According to recent Federal Reserve data, debit card fraud drove 39% of fraud losses at financial institutions in 2024, followed by check fraud at 30%. Victims of debit card fraud often report having their cards skimmed at gas stations, leading to multiple fraudulent ATM withdrawals. While they eventually get their money back, it takes time—time when their actual cash isn't available for rent, groceries, or other bills.

The Protection Gap

Under federal law:

• Credit cards: Your maximum liability is $50 if used fraudulently (often $0 with most issuers)
• Debit cards: If you report within 2 business days, you're liable for up to $50. After that? Up to $500. Wait more than 60 days and you could lose everything that was stolen.

Action Step: Save your debit card for ATM withdrawals. Use credit cards for all online purchases and recurring payments. The added protection and rewards are worth it.

2. Freeze Your Credit—It's Free and Takes 20 Minutes

Let me be blunt: If your credit isn't frozen, you're essentially leaving your financial front door unlocked with a sign that says "Come on in."

What a Credit Freeze Actually Does

When your credit is frozen, no one—including you—can open new credit accounts without first unfreezing it. This means even if a criminal has your Social Security number, date of birth, and mother's maiden name, they still can't open a credit card, take out a loan, or lease a car in your name.

Real-World Example: Remember the 2024 Slim CD cyberattack? It exposed the payment data of up to 1.7 million people. Hackers had access to the payment processor's systems for nearly 10 months, potentially compromising credit card numbers, names, and addresses. While this breach focused on payment card data, many large-scale breaches expose enough information for criminals to attempt opening new accounts. A credit freeze would have prevented that.

Common Myths Debunked

• "Won't it hurt my credit score?" No. Freezing has zero impact on your score.
• "Isn't it a hassle to unfreeze when I need credit?" Not really. You can temporarily unfreeze your credit online or by phone in minutes when you're ready to apply for a mortgage, car loan, or new credit card.
• "Don't I have to pay for it?" No. Credit freezes are completely free, thanks to federal law.

Action Step: Set aside 30 minutes this week to freeze your credit with all four bureaus (yes, four—most people forget about Innovis):

• Equifax: 800-349-9960 or equifax.com/personal/credit-report-services
• Experian: 888-397-3742 or experian.com/freeze
• TransUnion: 888-909-8872 or transunion.com/credit-freeze
• Innovis: 800-540-2505 or innovis.com/personal/securityFreeze

Pro tip: Save your PIN or login information in a secure password manager so you can easily unfreeze when needed. And don't skip Innovis—while it's less commonly used than the "big three," some lenders do check it, and identity thieves know most people forget to freeze it.

3. Monitor Your IRS Transcripts—The Fraud Protection Nobody Talks About

Here's where things get interesting. You've probably heard about credit monitoring, but have you ever checked your IRS transcripts? This is the blind spot that costs people thousands.

Why This Matters

A credit freeze stops someone from opening new accounts, but it doesn't stop all fraud. Criminals can still:

• File a fraudulent tax return in your name to steal your refund
• Report fake income to the IRS using your Social Security number
• Create synthetic identities that won't show up on credit reports

The Case That Should Terrify You

Tax identity theft happens when criminals use your Social Security number to file fraudulent tax returns and steal refunds. In some cases, fraudsters create fake W-2 forms or other income documents in victims' names. The IRS reports that tax identity theft remains a persistent threat, with criminals becoming increasingly sophisticated in their methods.

The victims? Many don't discover the fraud until they try to file their own tax returns and find someone has already filed using their information. By then, their tax refunds have been stolen, and they face the nightmare of proving to the IRS that they are the real taxpayer.

Here's the kicker: A credit freeze wouldn't have helped these victims. The fraud didn't involve opening new credit accounts—it was all about manipulating IRS records.

How to Protect Yourself

The IRS offers free transcript monitoring through their online account system. You can access:

• Wage and Income Transcript: Shows all income reported to the IRS in your name
• Account Transcript: Shows your tax return status and any payments made
• Return Transcript: Shows the actual return information filed

Action Step:

• Create an IRS online account at irs.gov/account
• Set a reminder to check your transcripts quarterly
• Look for any income you don't recognize or tax returns you didn't file
• If you spot fraud, immediately report it at IdentityTheft.gov

The Bottom Line

Protecting your finances doesn't have to be complicated, but it does require action. Think of these three steps as your financial firewall:

• Credit cards online = Protection for today's purchases
• Credit freeze = Protection against identity theft and new accounts
• IRS transcript monitoring = Protection against tax fraud and income misreporting

Together, these create layers of defense that make you a much harder target. And in the world of fraud, being a harder target often means you simply won't be targeted at all.

The best part? All three of these protections are completely free. The only investment is your time—about an hour total to set everything up.

Two Ways to Handle IRS Transcript Monitoring

When it comes to monitoring your IRS transcripts, you have two options:

Option 1: Do It Yourself (Free)

If you're comfortable navigating the IRS website and have the time, you can monitor your own transcripts:

Pros:

• Completely free
• Direct access to your information
• Immediate visibility whenever you want to check

Cons:

• You need to remember to check regularly (most people forget)
• Requires understanding what you're looking at in the transcripts
• You're on your own to identify discrepancies
• Time-consuming if you find an issue and need to resolve it

Best for: Self-directed individuals who are organized, detail-oriented, and comfortable handling financial paperwork.

Option 2: Outsource to a Tax Professional

Many people don't realize that proactive tax planning includes ongoing monitoring—not just filing your return once a year.

Pros:

• Professional reviews your transcripts regularly (monthly vs. you remembering quarterly)
• Expert eye catches issues you might miss
• Immediate action plan if fraud is detected
• Year-round protection, not just during tax season
• Peace of mind that someone is watching your back

Cons:

• Costs money (but often less than you'd think)
• Requires finding a trustworthy professional

Best for: Busy professionals, military members with complex tax situations, or anyone who values their time and wants expert oversight.

Professional IRS Transcript Monitoring

At Stellar Wealth Management, I offer IRS transcript monitoring as a standalone service specifically designed for military members and federal employees. Here's what you get:

Monthly Transcript Review: I pull and review your IRS transcripts every month, looking for:

• Unreported or fraudulent income
• Tax returns filed without your knowledge
• Discrepancies in your wage and income statements
• Identity theft red flags

Immediate Alerts: If I spot anything unusual, you'll hear from me immediately—not when you're trying to file your taxes next April.

Expert Resolution Support: If we do find fraud, I help you navigate the IRS reporting process and work to resolve the issue quickly.

Proactive Tax Planning: Understanding what's in your transcripts throughout the year enables better tax planning strategies tailored to military and federal employee compensation structures.

This is a standalone service available to anyone who wants professional monitoring without needing full tax preparation services.