What happens if my credit card is stolen?

Credit cards should be valued and protected the same way you would safeguard your cash. In the event your card becomes stolen, a thief could potentially max out your card. However, there are many safety features put in place by credit card companies so that fraudulent use can be detected early. Also, cash is virtually irreplaceable while credit cards typically offer fraud protection.

Different Ways Credit Cards can be Stolen

There are several ways that credit cards are at risk of being stolen. If you are the victim of a mugging while you are carrying your card, your card will probably be stolen along with your other wallet type items. Muggers are usually interested in cash and jewelry (items that can be easily pawned), and your credit card could very likely end up in a dumpster. However, you should not take any chances and as soon as you have notified the police of the crime you should immediately report the theft to your credit card company.

In addition to your card being physically stolen like in the above example, your credit card number can be stolen as well, allowing a thief to use your card even though the card is still in your possession. This type of crime is usually committed one of three ways: through a point of service merchant, through an online merchant, or through an internet hacker.

When the crime is committed by a merchant it is usually done so by a dishonest employee. In these instances, the card itself is not taken and so any fraudulent use of the card would most likely be done via internet shopping or at places where the physical card does not need to be present. Since most online retailers require the security code from the back of the card number as well as the name on the card, the expiration date, and the card number itself, it is not easy for a cashier at a store to steal all of this information quickly and discreetly at the time you are making a purchase. Furthermore, most retailers have installed credit card teller machines for you to swipe your own card, eliminating the need of handing your card over to a stranger.

Online merchants, including hotels and other reservations made by internet or phone, take all of your card information from you at the time you are making your purchases. An unscrupulous person now has all the information they need to make purchases with your card. Of course, stealing your information and then using it without getting caught is not necessarily easy (Internet Protocol addresses can be tracked as well as Ship To locations!), so the big time credit card fraud is usually handled by professional criminals.

Professional criminals usually work by stealing information from the internet highway or by hacking directly into your system or a merchant’s system. Unsecured networks are the most commonly hit since they require very little hacking. Credit card information that is stolen through these means is oftentimes committed from overseas, making it harder to catch these criminals. However, credit card investigators work with the Federal Trade Commission (for charges over $2,000) and the United States Secret Service (for fraud activity over $150,000) to capture criminals and reduce crime.

How to Handle a Stolen Credit Card

If your credit card is stolen, you must immediately report it to your credit card company. You should also do the same if you discover or suspect any fraudulent activity on your account. Once you have telephoned your credit card company (in addition to being on the card itself, the phone number can be found on your statement, online, or through Information), your current credit card number will be closed and a replacement card will be issued to you. It will come to you via mail and require activation from your home phone to ensure you received it.

Your credit card company will also send you a Fraudulent Use report. It is imperative that you complete this affidavit right away. Most credit card companies offer 100% fraud protection, so you will not be responsible for any charges incurred that you report as fraud. Furthermore, this report is used by the bank investigators in conjunction with government offices to locate the criminals and prosecute them accordingly.

How to Safeguard a Credit Card

When you receive a credit card, you should record the bank institution, card number, and the customer service phone number on a manual log that you keep in a secure location. This way you will always have access to pertinent information in the event your cards become lost or stolen. Do not store any sensitive financial information on your computer. When possible, use disposable credit card numbers when shopping online or over the phone.

Your credit card is valuable and should be treated as such. Never keep your PIN (Personal Identification Number) in the same place as your credit card, otherwise cash advances can be easily withdrawn from an ATM (Automatic Teller Machine). Know where your card is at all times! If your card is missing, it is in your best interest to report it as stolen and receive a replacement card. Balance your monthly bank statements in a timely fashion so that you can catch any suspicious activity early on.

Most credit card companies already monitor your daily activity for any unusual purchases, such as multiple gas station purchases in one day (small amounts add up fast!) or several large purchases all on one day (furniture store followed by a computer store, etc). They also monitor for more obvious fraud activity such as multiple overseas charges rapidly hitting your account. They will see this activity long before you even know it’s occurring.

If a credit card company detects anything suspicious, they will phone you to verify recent purchases and may even temporarily disable your card (declining it from future use) until you have confirmed the card is in your possession and that the charges are legitimate. By stopping fraudulent use early on, it minimizes the overall financial impact.

Many people will never become the victim of credit card fraud, and for those that do, safeguards are in place to minimize or eliminate any financial loss. Treat your credit card like cash and if it becomes lost or stolen, report it immediately. Using a credit card that offers 100% fraud protection will provide you with extra security and peace of mind. To compare credit cards online now, use the free credit card tool located on our home page. Get started “Chasing” down the best credit cards!

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Disclaimer: This content is not provided or commissioned by American Express, Visa, MasterCard, Discover, or any other credit card company or issuer. The opinions expressed here are the author's alone, not those of any credit card company or issuer, and have not been reviewed, approved or otherwise endorsed by any credit card company or issuer. Credit Card Chaser may be compensated through various affiliate programs with advertisers. As always, Credit Card Chaser is an independent website commmitted to helping people research credit card offers and find the best credit card!