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.
Additionally, if you report the loss before your credit cards are used fraudulently, the card issuer cannot hold you responsible for any unauthorized charges, according to the Fair Credit Billing Act (FCBA).
If someone gains access to your credit card information, but not the card itself, you have zero ($0) 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 Electronic Fund Transfer Act (EFTA), 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 (2) business days of learning about the loss/theft, you are only liable for up to $50.
If more than two business days go by after you learn about the loss or theft, but less than 60 calendar days have gone by since your statement was sent to you, your maximum loss is $500.
Even worse, you could be subject to unlimited losses if you fail to report unauthorized use of your debit card within 60 days after your bank statement is sent to you.
While that may sound harsh, consumers should routinely check their accounts to ensure nothing fraudulent takes place.
And there is a caveat. If your debit card information was stolen, but not the card itself, you won’t be liable for the transactions if you report them within 60 days of your statement being sent to you.
Additionally, this is just the law. Many individual banks actually limit the losses you can incur, though this should illustrate the relative safety of using a credit card as opposed to a debit card.
All 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.
Conversely, if you wait too long, you could face huge financial losses and long-term damage to your credit profile and credit score.
If you do discover fraudulent charges on one account, be sure to check all other accounts as well. There’s a chance the damage could be more widespread.
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!