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Most major credit cards offer some level of credit card fraud protection against fraudulent charges to their card. You usually do not have to pay for this benefit. According to the United States Federal Reserve, you are not liable for any fraudulent charges above $50 to your credit card, whether or not your card provider offers credit card fraud protection as a benefit or not. So there’s no need to pay extra for credit card fraud protection.
But does credit card fraud protection actually work?
If you follow the proper procedures, your creditor should erase any fraudulent charges that appear on your account. In order to avoid any hassles, you should report fraudulent charges — or a lost or stolen wallet or credit card — immediately. Do not delay. If you think you may have lost your wallet or a credit card outside your home, call and cancel your cards right away. If you find it a little bit later, the worst you’ll have to do is wait about 48 hours for your new cards to arrive. If you don’t report your card missing or stolen right away, however, you could be liable for unauthorized charges.
Keep the 800 numbers that are printed on the back of your credit card in a safe place in your home — not in your wallet — for quick access if you have to report a lost or stolen card. If you are traveling, leave the information with someone trustworthy and reachable.
Additionally, follow these steps to spot credit card fraud immediately:
- Read your credit card statements when they arrive.
- If you notice charges that you don’t recognize, investigate them immediately. Some charges (especially from online retailers or small businesses) may show up under the name of a parent company or holding company. This is why it helps to keep your receipts.
If you discover that you have been the victim of credit card fraud, follow these steps:
- Report the fraudulent charges by calling the number regarding “billing inquiries” or if your credit card company has a specific number to report fraud, call that number.
- Provide the company with any proof you can, including your account number, the amount of the fraudulent charges, and the company name associated with the charge.
- Also file a complaint in writing or online within 60 days after you received the statement with an error. Again, submit any relevant information.
- Send the letter certified mail, return receipt requested, to prove you sent it within 60 days.
- Check your credit card company’s website for specific directions related to reporting fraudulent charges on your credit card.
- Sign your credit cards as soon as you receive them.
- Don’t let your card out of your sight when you make a purchase
- Don’t leave credit cards lying out on your desk at work
- Shred old credit cards so the account number is no longer visible
- Shred correspondence with your account number on it, including statements that you no longer want to keep, or store them in a safe, locked place
Remember, by law, you are not liable for any charges over $50. Cards like American Express have no deductible, so you get 100 % fraud protection.
Other Fraud Protection Features Offered by Credit Cards
Some credit card companies offer additional fraud protection benefits. For instance, the credit card company may call you if they notice “suspicious activity,” which could include big ticket purchases or purchases made out of state, on your card. It’s a good idea to call your credit card company before going on vacation or if you plan to use your card frequently, for instance, to buy souvenirs on vacation.
In my experience, this fraud protection can work to alert you to a stolen card, or (more likely) stolen credit card number, that you may not be aware of. I’ve received calls a few times from Capital One when I took a weekend trip out of state and put everything on my cash back credit card.
Some credit card companies offer “virtual account numbers” for online purchases. This provides an added level of fraud protection.
Be Proactive about Credit Card Fraud Protection
The best credit card fraud protection requires no special card benefits and won’t cost you a penny. To protect yourself against credit card fraud: