A:

In the event that your credit card is stolen in the United States, federal law limits the liability of card holders to $50 regardless of the amount charged on the card by the unauthorized user. In today's world of electronic fraud, if just the credit card account number itself is stolen, federal law guarantees that the card holder has a zero liability to the issuer.

As a card holder, you should notify the issuer immediately if you notice that your credit card is missing or stolen. This early notification will give the issuer time to help you with the following:

1. Verify if and where fraud has occurred.
2. Remove unauthorized charges from your credit.
3. Close down your account to prevent future fraudulent charges.
4. Issue you a new card and account number.

Several credit card companies have adopted a "zero liability" policy which means the consumer is not held responsible for any fraudulent charges. You should also check with the three major credit reporting agencies and obtain a copy of your credit report to be sure that nothing else has been accessed fraudulently.

Be wary of credit card protection offers. This type of insurance is unnecessary because federal law limits your credit card fraud liability. But scam artists try to sell $200-300 credit card insurance by falsely claiming that cardholders face significant financial risk if their cards are misused. According to recent Federal Trade Commission estimates, 3.3 million consumers have purchased unnecessary insurance to prevent unauthorized use of their credit cards. (For related reading, see 6 Major Credit Card Mistakes and Expert Tips For Cutting Credit Card Debt.)

This question was answered by Steven Merkel

Hot Definitions
  1. Trumpcare

    The American Health Care Act, also known as Trumpcare and Ryancare, is the Republican proposal to replace Obamacare.
  2. Free Carrier - FCA

    A trade term requiring the seller to deliver goods to a named airport, terminal, or other place where the carrier operates. ...
  3. Portable Alpha

    A strategy in which portfolio managers separate alpha from beta by investing in securities that differ from the market index ...
  4. Run Rate

    1. How the financial performance of a company would look if you were to extrapolate current results out over a certain period ...
  5. Hard Fork

    A hard fork (or sometimes hardfork) is a radical change to the protocol that makes previously invalid blocks/transactions ...
  6. Interest Rate Risk

    The risk that an investment's value will change due to a change in the absolute level of interest rates, in the spread between ...
Trading Center