It is important to do what you can to protect yourself from identity theft in this manner. Happily, there is a $50 liability limit on credit cards (as long as you report the problem within a couple of days), and some debit card issuers are starting to put liability limits on their cards as well. Liability aside, though, it is still important to practice caution when dealing with credit cards and debit cards.

Tips for better credit card security

There are some simple things you can do to decrease the chances that your credit card or debit card will be involved in identity theft. While there is no way to completely guarantee that your identity won't be stolen, the things that you do can influence the likelihood. Here are some tips that can help you increase security with your credit cards and debit cards:

• Sign the back of the card. Many businesses now compare the signature on the back of the card with that on the receipt. If they don't match, then they will reverse the purchase. It would be nice if every business asked for your ID (such as driver's license) to verify card use, but they do not.
• Keep your cards in sight. Keep your wallet and purse close at hand. Do not leave it in the car, or unattended at church, restaurants or the doctor's office. Additionally, do not lend your card to friends and relatives. You should be the only person to use your card. If you want to add someone to your account, you can order an extra card for him or her.
• Memorize your personal identification number (PIN). Do not carry this number about with you in your purse. And certainly do not write it on the back of your debit card. A PIN can also be used to get a cash advance from a credit card. Also, choose a PIN that is unrelated to your phone number, significant birthdays or your Social Security Number.
• Be choosy about who gets your information. Do not just give out your information to anyone. Be especially careful of mail order and phone order situations where you give out your credit card number. Also, it is better to use your credit card online, and avoid using your debit card for online purchases. Consider third-party payment programs like PayPal and Google Checkout to limit the places where your information is given out online.
• Review your statements. Look over your bank account statement and your credit card statement every month. Reconcile your accounts, and watch for signs that someone else may have access to your accounts.
• Check your credit report. Regularly check your credit report to ensure that new accounts haven't been opened in your name. You need to make sure that no one is posing as you and getting their own credit cards in your name.

Steps to take if you think your identity has been stolen

One of the best things you can do is keep an "emergency list" of your credit cards, their numbers, and the hotlines you are to call if they are lost or stolen. Also keep this information for your debit cards. This list should be kept in a safe place, and not on your person. This will allow you to be able to check off your credit cards against the list (to check if they are stolen or lost), and it will provide a quick reference for the information you need when you notify the card issuers.

Here are the people you should notify if you suspect identity theft:

1. Card issuer. Let the bank or card issuer known immediately that your card has been lost or stolen. Also, inform them of charges you suspect are fraudulent.
2. Credit bureaus. Have a "fraud alert" placed on your credit reports at the three major credit bureaus.
       Equifax: 1-800-525-6285
       Experian: 1-888-397-3742
       TransUnion: 1-800-680-7289
3. Local police department. You should file a report with the local police department. This can serve as "proof" that you are actively trying to solve the problem.
4. Call the FTC's hotline: 1-877-438-4338.