There are myriad ways that a scammer can get hold of your credit cards. If you lose your wallet, you’re just begging for illicit charges to be made on your card, but even if you’re ultra-careful with your plastic, it can still happen. This can be a huge hassle and you can be held liable for some of the charges the thief made if you don’t handle the situation correctly. Here’s what you need to know to ensure that you end up with a financial clean slate after your cards are stolen.
Report the theft or loss ASAP
If your wallet or purse is stolen, reporting the theft to your credit card or debt card issuers is a no-brainer. You should do it as soon as you can after the incident. But if you misplace your wallet, you may put off reporting it, hoping that you’ll find it and not have to wait on new plastic to be sent out to you if you cancel your cards. If this is the case, log onto your account online and see if there have been any transactions since you lost your cards. If so, cancel ASAP. If there are none, you may want to give yourself 24 hours to try and turn up your wallet or purse before you call and say they’ve been lost or stolen (but only for a credit card – see more on debit cards below).
Why you need to report the loss of a credit card promptly
If you report that your card was lost or stolen prior to any transactions occurring, you will not be held liable for any charges because the credit card issuer shouldn’t have approved them. If, however, you report it after some charges have gone through, the first $50 per card is on you. If you have a number of cards, this could quickly add up to several hundred dollars of debt you don’t want (and maybe can’t afford to pay). A plus in your favor is that if the card was used online or over the phone instead of in person with the physical card, you also shouldn’t be held liable for any charges.
How lost or stolen debit cards differ from credit cards for liability
Debit cards have much higher stakes when they’re lost or stolen and should be reported more rapidly than a missing credit card even if you think it may turn up somewhere. Here’s why. If there are any illicit charges made with your debit card, you face liability. If you report the loss or theft within 48 hours, your liability will cap at $50 but, depending on your bank policies, after 48 hours you can be on the hook for up to $500 of bogus charges. And if you let it linger for months, you’ll be on the hook for all of it. What also makes it worse with debit cards is that it can take time to get the funds back into your account, which can cause problems paying your bills.
How to report a lost or stolen card
The fastest way to get a card shut down and end unauthorized use is to call the card issuer. Do this ASAP but then also follow up with a written letter as a backup measure sent via certified mail with return receipt to the correspondence address listed on your credit card statement or on the issuer’s website (this is usually different from the address you send payments to if you still mail yours in).
Things to do after your report the lost or stolen card
After you report the theft or loss, monitor your online activity closely to see how many charges, if any, show up. Be sure to follow up with your card issuer if you don’t see a reversal of the charge within 30 days for a credit card and within five days or less for a debit card so long as you properly reported the theft. With the debit card, expect to see reversals after the first $50 (depending on your bank’s policy). Follow up with your card issuer’s fraud department if the charges aren’t reversed.
Also, if you have any bills set up to auto-pay from your credit card, you should move these to your new card(s) as soon as you get the fresh plastic. This can protect you from a late payment noted on your credit report for a missed bill that’s returned from your card issuer because that account has been shut down. Also, you shouldn’t have to make any payments for unauthorized credit card charges. But if you pay less than the minimum, you may have an item reported on your credit that you’ll have to fight. Pay the minimum and then look for charge reversals on the next statement.
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