What Is Carding?

What Is Carding?

Let me explain carding directly: it's a form of fraud where someone uses stolen credit or debit card information to buy prepaid store-branded gift cards that work just like cash.

You should know that the stolen details or the gift cards themselves can then be sold to others for buying goods. The thieves involved in this, the ones handling the credit and debit card fraud, are known as carders.

Key Takeaways

Carding boils down to the theft and resale of your credit or debit card information for making fraudulent purchases. This information gets bought and sold on online card forums. Technologies such as CVVs, CAPTCHA, and multifactor authentication offer some protection against these carders.

How Carding Works

Carding typically begins when a hacker accesses a store's or website's credit card processing system. From there, they grab a list of recently used credit or debit cards. Hackers exploit flaws in the security software meant to safeguard these accounts.

In some instances, hackers deploy a scanner to copy the magnetic strip coding from a physical card in use at a store. Another approach involves stealing the information right from the source by hacking into the account holder's bank details.

With newer cards featuring PINs and chips, it's harder to use stolen cards in physical point-of-sale transactions. That's why card-not-present sales have become the main target for theft.

The Carders' Role

The hacker sells the stolen credit or debit card numbers to a third party, the carder, who then uses that information to buy a gift card. This whole carding industry operates through carding forums, where stolen card info is bought and sold, and these sites also facilitate money laundering.

Important Note on Liability

According to the Consumer Financial Protection Bureau, you generally have no liability for unauthorized use of your account number. If your physical card is stolen and you report it quickly, your liability caps at $50.

Consumer Protection Measures

If your physical credit card gets stolen and you report it, consumer protection laws limit your liability to $50. For stolen card numbers used fraudulently, the Consumer Financial Protection Bureau states you should have zero liability.

By the time you notice the theft, the fraudster has often already bought high-value items like cell phones, TVs, or computers—these don't need registration and can be resold easily. Carders frequently use a third party to receive and ship the goods, reducing their own risk of detection. They might also sell these items on anonymous websites.

Fast Fact on Carding

Carding depends on speed: a key element is testing stolen cards quickly to check if they're still active or have been canceled.

Card Terms

Carding has its own terminology you need to know. 'Fullz' is slang for full information, which includes a person's real name, address, and ID details—enough for identity theft or financial fraud.

A 'credit card dump' is an unauthorized digital copy of a card's information, obtained by copying from the physical card or hacking the issuer's network. This method isn't new, but its scale has grown massively, sometimes affecting millions of victims.

How Companies Fight Carding Fraud

Companies employ various strategies to counter carders, such as requiring checkout info that carders wouldn't have.

Address Verification System (AVS)

An address verification system (AVS) compares the billing address you provide at online checkout with the one on file at the credit card company. A working AVS can block mismatched transactions, and for partial matches, the seller decides whether to proceed. It's used in the US, Canada, and UK.

IP Geolocation Check

An IP geolocation system matches the user's computer location to the entered billing address. A mismatch could signal fraud, though legitimate reasons like travel exist, so it requires further checks.

Card Verification Value (CVV)

The CVV is the three- or four-digit number on your card, adding security for non-physical purchases. It verifies you have the actual card, so without it, thieves struggle. Stored in the magnetic strip or chip, it's submitted with transactions, and issuers can approve, refer, or decline based on validation.

Multifactor Authentication (MFA)

Multifactor authentication requires two or more credentials, like a password plus a token or biometric, creating layers that block unauthorized access. It started with two factors but now often includes more.

CAPTCHA

CAPTCHA tests prove you're human, not software, by tasks like typing distorted letters or spotting anomalies in images—easy for people, hard for computers.

Velocity Checks

Velocity checks track transaction frequency from the same card or visitor in short time frames. Humans don't make rapid payments like that, so it monitors by amount, IP, address, BIN, or device.

How Will I Use This in Real Life?

Often, you'll only discover a hack when an unauthorized charge appears on your statement. Monitor your accounts regularly and report issues immediately to the issuer.

Sometimes theft happens because of your own slip-ups: never share passwords, don't give card info to unsolicited contacts via phone, text, or email—verify them independently, and avoid clicking suspicious links. Scammers use advanced tools like voice cloning or image alteration to deceive you.

What Is a Credit Card Skimmer?

A credit card skimmer is a hidden device in a legitimate reader that captures card data. Gas pumps are common targets; the FBI recommends paying inside or using visible pumps less likely to be tampered with.

How Do Criminals Steal Credit Card Information?

Criminals steal info through phishing to trick you into revealing details, hacking retailer or bank systems, or using skimmers at physical locations. This data ends up on carder forums for sale and unauthorized use, continuing until you spot and report suspicious charges.

What Is a Carding Attack?

A carding attack is rapid multiple orders on a site using stolen card info, shown by sudden order spikes from one address. Security tech can detect and halt these.

How Can I Protect My Business From Carding?

For online sales, use fraud prevention like CAPTCHA. In physical stores, watch for tampering on card readers.

The Bottom Line

Stolen credit and debit card info fuels schemes like identity theft and money laundering. Carding specifically uses this to buy gift cards as cash equivalents, involving thieves and buyers. Minimize risks by checking accounts often, reporting unauthorized activity, and staying vigilant against direct fraud attempts via phone, email, or text.