If you lose your credit card, don’t lose hope. It’s quite effortless to call the credit card issuer to report the credit card missing, and subsequently have the credit card canceled.
Rest assured that the card issuer will generally protect you from any fraudulent charges and activity that take place, though the sooner you report the loss the better.
Note that your maximum liability under federal law for unauthorized use of your credit card is $50, which is per credit card. However, if you have homeowners insurance you may be protected even further.
If you report the loss before your credit cards are used, the card issuer cannot hold you responsible for any unauthorized charges, according to the FCBA (Fair Credit Billing Act). If you only lose your credit card number, but not the card itself, you have no liability for unauthorized use.
Rules Differ for ATM/Debit Cards
The rules are different for ATM/Debit Card loss and fraudulent transfers. According to the EFTA (Electronic Fund Transfer Act), the card issuer cannot hold you liable for any unauthorized transfers if you report the card missing before the unauthorized charges take place. However, if unauthorized charges take place before you report the card missing or stolen, your liability under federal law is dependent upon how quickly you report the loss.
If you report the loss within two days of an illegal transfer, you are only liable for up to $50. But if you fail to report the loss within two days, you could be liable for up to $500. Even worse, failure to report an unauthorized transfer within 60 days after your bank statement containing unauthorized use is mailed to you can result in unlimited losses.
There is a caveat. If your debit card information was stolen, but not the card itself, you are only liable for transfers that occur after 60 days following the mailing of your bank statement containing the unauthorized use and before you report the loss.
That said, make sure you call your card issuer immediately if you suspect your credit or debit card is lost or stolen. Sure it may turn up, but it’s not worth the risk if you don’t recover the card in a timely manner.
The only downside to reporting the card lost is that you’ll have to wait a week or more for your new credit card to arrive. That’s why it’s best to always have a back-up credit card, left somewhere other than your wallet or purse in case you lose everything.
And remember, if you get a replacement credit card, although the account number will be different from the original card, you will not lose the credit history on the account, and your credit score will not be affected negatively.
Adversely, if you wait too long, you could face huge financial losses and long-term damage to your credit profile and credit score.
Here are some useful tips to avoid the loss or theft of your credit/debit card and credit/debit card information:
- Never carry more credit cards than necessary
- Never leave personal belongings unattended
- Keep credit cards in carry-on baggage
- Be cautious when disclosing your account number(s)
- Shred old, inactive credit cards
- Don’t write down your PIN number, memorize it
- Periodically check your account activity
- Shred account statements after they have been reviewed
- Shred receipts with any sensitive account information
- Never put your account number on the outside of an envelope or postcard
- Never share sensitive account information with friends or colleagues
- Order a free credit report every four months to monitor your credit profile
Tip: Bank-issued debit and credit cards may be replaced at local branches in some cases. Inquire with your bank for speedy replacement!