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. Several credit card companies have also adopted a zero liability policy, which means the consumer is not held responsible for any fraudulent charges at all. The terms and conditions of your cardholder agreement often spell out the details.
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 card account.
3. Close down your account to prevent future fraudulent charges.
4. Issue you a new card and account number.
Be wary of credit card protection offers. This type of insurance is unnecessary because of the federal limits in place. 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.)
For proactive measures you should take, see 7 Ways To Protect Against Credit Card Hacks.
This question was answered by Steven Merkel