Encrypt data or prevent its being stored to DB

You have described two different things. You can either encrypt the data, or you can delete it from the entry after it's been processed so it is not stored. If it's a Credit Card number I would suggest either deleting it, or changing it's value so it only retains the last 4 digits.

Which method you choose is going to depend on what you are doing with this data.

If you need it visible in the entry details by an admin then you'd have to encrypt and decrypt it.

If you are processing the credit card when the form is submitted via a customization, then you would just store a portion of the card data and not the entire card number after it's been processed.... but only if you are processing the card automatically when the form is submitted via a customization.

Let me know which you would prefer and I can point you in the right direction.

You would write custom PHP and add it to your themes functions.php (or create a custom plugin if you know how to do that) that uses the gform_post_submission hook to manipulate the value of the field you are using for the credit card.

Here is documentation on the gform_post_submission hook:

http://www.gravityhelp.com/documentation/page/Gform_post_submission

It has access to the Entry object for accessing and changing entry data.

This hook is fired after the entire form process is complete and an entry exists. So it would be fine to do what you need to do at this point.

When you use the gform_post_submission hook to access and manipulate the entry object you ARE accessing the entry in the database once it's been submitted.

The gform_save_field_value hook happens BEFORE the value is stored in the database. So yes, you could use that too as long as you are processing the credit card field to do whatever you need to do with it before this hook is fired.

I think the best way to handle this is using a combination of hooks. Use the gform_save_field_value to truncate the credit card number and then use the gform_post_submission to do your third party integration. The only thing you have to be aware of, is that you will need to use the $_POST variable in the gform_post_submission hook in order to access the full credit card number. If you use the $entry variable, you will only get the truncated number.

add_action("gform_post_submission_9", "donation", 10, 2);
function donation($entry, $form){

    //NOTE: need to access credit card via the $_POST global variable because the $entry variable will only have the last 4 characters
    $full_credit_card = $_POST["input_22"];    

    include("donate.php"); //This has a bunch of my third party processing stuff
}

add_filter("gform_save_field_value", "save_field_value", 10, 4);
function save_field_value($value, $lead, $field, $form){

    //trimming credit card field to last 4 digits
    if($form["id"] == 9 && $field["id"] == 22)
        $value = str_repeat('x', (strlen($value) - 4)) . substr($value,-4,4);

    return $value;
}

Very nice! I am glad it worked out for you.