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Protect Your Personal Data

Credit card breaches highlight the need to safeguard your personal information

Target loto with financial data (Mike McQuade)

Are you a bull's-eye target for identity theft? Protect passwords and personal data to lower your risk. — Mike McQuade

En español | As the data hacking of Target, Neiman Marcus and other merchants' customer information recedes from the headlines, you may be tempted to let your guard down — to let your passwords get dusty and to be nonchalant about your card swipes.

Don't.

The Identity Theft Resource Center has been tracking breaches since 2005, when 157 were reported. In 2013, there were 619. Plus, nearly 5 percent of U.S. consumers suffered credit card fraud in 2013, according to Javelin Strategies and Research.

In 2013, 1 in 3 victims of a data breach became a victim of identity fraud. In 2010, this was 1 in 9. "We think of our own public safety as not walking through a dark alley at night and parking under a streetlight," says Eva Velasquez, the center's CEO. "That's so yesterday."

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So how do you protect yourself? By adopting new habits in how you do business, monitoring your financial life and safeguarding your electronic devices. Checking off all the items on the following list doesn't guarantee you won't be a victim. It does increase the likelihood that if your accounts are hacked, you'll notice this — and be able to shut it down — quickly. And that's half the battle. Here's what to do.

1. Monitor your financial life

Keep an eye on your bank and credit card account activity, as well as your credit report. Velasquez checks her bank accounts online almost daily. I check my credit card statements several times before the end of each billing statement. What's more, using AnnualCreditReport.com, you should request one free credit report every four months from the three major reporting bureaus.

2. Layer up

In addition to checking your report, you can put a freeze on it in most states even if you haven't been an ID theft victim. That prevents thieves from applying for credit in your name. It typically costs $3 to $10 to freeze — and unfreeze — per credit-reporting bureau. You also can get credit monitoring for free from several sites online, as well as through Target.com if you were affected by the breach there.

Or, says Boston-based McAfee security expert Robert Siciliano, you can subscribe to identity theft protection services that help you proactively monitor activities on your accounts and sort out a mess (if there is one) after the fact. Siciliano has both ID theft protection and a freeze. "In the industry we talk about layered security," he says. "It's like when you wear layers to prevent you from getting cold. The more layers, the more secure you will be."

3. Ditch the snail mail

Neal O'Farrell, executive director of the Identity Theft Council, calls the U.S. postal system "an absolute gift" for identity thieves, who can reach into your mailbox and grab whatever's there. Subvert them by doing as much banking and bill paying online as possible. Doing this makes you less vulnerable, not more.

4. Protect your technology

As you are busier online, you need your devices to be as secure as possible. Make sure they have the latest antivirus software and the most recent secure browser, says Siciliano. If you insist on doing transactions via Wi-Fi, be certain you've got a secure (i.e., encrypted) connection, which freebies generally don't offer.

5. Fix poor passwords

Weak passwords are a crook's best friend. Make yours long and complex, and change them often — not just on your bank account but on your email and social media, too.

—With additional reporting by Arielle O'Shea

Want more advice? Jean Chatzky talks dollars and sense at aarp.org/jeanchatzky.

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