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A phenomenal growth in the number of credit card transactions, especially for online purchases, has recently led to a substantial rise in fraudulent activities. Implementation of efficient fraud detection systems has thus become imperative for all credit card issuing banks to minimize their losses. In real life, fraudulent transactions are interspersed with genuine transactions and simple pattern matching is not often sufficient to detect them accurately. Thus, there is a need for combining both anomaly detection as well as misuse detection techniques. In this paper, we propose to use two-stage sequence alignment in which a profile analyzer (PA) first determines the similarity of an incoming sequence of transactions on a given credit card with the genuine cardholder's past spending sequences. The unusual transactions traced by the profile analyzer are next passed on to a deviation analyzer (DA) for possible alignment with past fraudulent behavior. The final decision about the nature of a transaction is taken on the basis of the observations by these two analyzers. In order to achieve online response time for both PA and DA, we suggest a new approach for combining two sequence alignment algorithms BLAST and SSAHA.