For many people, when they lose their credit card their first instinct is to wonder whether it’s being used by someone else. Secondly, they wonder whether they have fraud protection against the purchases being made. It is important to know what you should do in the event your credit card has been lost.
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Today, more than ever before, the use of credit cards is at an all-time high, with many people using their credit cards to pay for everyday purchases as well as paying for their utilities, phone bills and more. In some cases, this behavior is due to the desire to rack up rewards points or flight miles. Other times, it’s due to a lack of cash on hand to pay for these things. In either case, losing one’s credit card can be a scary predicament.
Lost Credit Cards: Reporting the Loss
According to the Federal Trade Commission (FTC), you should report and cancel your lost credit card to the issuer immediately after you discover your card is missing. The main reason for this is if you report your card missing before someone finds it and potentially uses it, and then you have $0 in liability according to the Fair Credit Billing Act (FCBA).
In general, because of the recent changes to the Credit Billing Act, if you lose your credit card, your liability is going to be minimal regardless. According to the FTC, $50 is your maximum liability for any lost credit card, as long as you report the loss. Don’t wait a couple of weeks to report your missing credit card as protection doesn’t extend indefinitely.
You should be able to find the phone number for reporting a lost credit card on your billing statement from your credit card company. In addition, you can access that information online.
It’s important to note that if you lose your ATM card the rules are different than if you lose your credit card. In this case, your liability increases the longer you wait to report the loss. Reported immediately, then you have a $50 liability just as you would with a credit card. Wait two days, and your liability increases to $500. You can learn more about ATM cards from the Electronic Funds Transfer Association (EFTA).
Lost Credit Cards: Zero Fraud Liability
You’ve probably heard the term zero fraud liability, or a similar term from your credit card company. Most credit card companies offer some sort of protection against the loss of your credit card. However, before you select a credit card, you’ll want to read the fine print included in the terms and conditions.
You might be surprised to learn that the fraud liability terms are pretty much the guidelines from the FTC, telling you that your maximum responsibility will be $50 if you report the loss of your card in a timely manner. While it’s nice to have this in writing, as this is actually the law, it’s not a special perk or anything like that.
You should look for credit cards that offer you real zero fraud liability, which means you pay nothing out of pocket if you lose your credit card. Often you’ll find that this is something offered by Visa or MasterCard, rather than a specific credit card issuing company like Capital One or Bank of America and so on.
Lost Credit Cards: Replacing the Card
Another consideration you want to make when choosing your credit card company is how they handle replacing a lost credit card. You might be surprised to learn that many credit card companies now charge a fee ranging from $5-$25 for replacing a lost credit card. These fees usually apply to stolen credit cards as well.
Not all credit card companies charge a fee for replacing a lost credit card. However, those that do will charge the fee directly to your credit account, in most cases. You might want to ask about the possibility of paying for the fee out-of-pocket if you’re close to your credit limit and such a fee would put you over the limit.
Lost Credit Cards: Protecting Your Credit Card
The best way to handle loss is to prevent credit card theft or loss it in the first place. One way to manage this is to ensure that you have a routine when it comes to your credit card use. For example, each time you use your credit card, put it right back into your wallet in the same spot, each and every time.
The next step is to protect your wallet as well and ensure that if you carried it in your pocket it fits correctly in your pocket, and ideally is buttoned or zippered into a pocket. If you carry a wallet in your purse, turn the flap of the purse in towards your hip when you walk around so that you will notice if anything falls out, or the flap isn’t secure.
Protecting your credit cards is important, as dealing with fraudulent charges can be both time-consuming and stressful. The nice thing is you don’t have to worry about how it will affect your credit because of the protections of the FCBA.
Visit the FREE credit card chaser to see how different credit card companies handle lost credit cards!
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