"how does a credit card company decipher if excessive use is fraud or not "?

Answer 1

Most credit card companies will notice your spending habits. If something is out of the ordinary, it's red flagged.

My bank canceled my card on me (sucked since I was in Chicago) because they noticed a bunch of purchases totaling around $1200+. Not only were the charges been made outside the country, they were for stores that were no where around my city and most done through the internet. I called when I got back into town and was able to get all the money refunded from these companies (and my bank) by filing fraudulant charges.

Answer 2

Some activity triggers internal alarms. For example, I once used my Amex to fill my cars and gas cans prior to a hurricane. This use was deemed "suspicious" by the internal software and my card was frozen. I had to call to get it unlocked. Any use outside your normal use will trigger a freeze. Gas station use (crooks often run a card at a gas station to see if it is good) then using the card after seems to trigger alarms. Use of the card out of state then the same day. Using the card on on-line purchases several times in a short period. Charging on-line and shipping to an address not your own. Purchases of gift cards is big.

Answer 3

They have tracking system that is predictive in nature that monitors use and type of transactions. If transcations are excessive for a period fo time that does not fit your pattern or in amounts that do not fit your pattern then it will decline and you will have to call and explain that it is you who is using the card. This has happen to me two weeks ago and the credit card company shared this information with me.