It happens quite a lot. Luckily, most credit card companies are clamping down and you are not liable if you report directly to their fraud department, and in most cases, their fraud dept. calls you to verify suspicious transactions (I love it when they call me, even when the transaction was legit).

I recently had my mastercard charged monthly by usfreeads.com website (a classifieds site) and they were charging me $12 every month. To boot, I was also charged $78 a month from Yahoo Personals by someone with a username "Tinkerbell" in California -- I had to argue my ass off with Capital One that I did not make such authorizations, and MONTHS later, after many phone calls, faxes, emails, etc, received my money back. What a headache though.

Warning: stay away from pre-paid credit cards. I lost $1300 a few years ago when some idiot used my card # to purchase 13 train tickets in Italy, somewhere I've never been. I filed a dispute and was promised a refund. 3 months later I was told by NextwaveTitaniumplus Mastercard that I would not be getting my refund, and I just lost the money. Pre-paid cards are insecure, and if it's compromised, your f*cked, period.