When a Credit card is stolen or rather misplaced, it’s always a frightening experience for the card owner. But all is not lost as the card owner can act fast as soon as he/she noticed the missing card. Your debt payment is limited by law, and the major credit card payment processors all have $0 fraud liability policies, meaning that you won’t have to pay for fraudulent charges as long as you act responsibly.
Make a report about your lost or Stolen credit card
Reports on stolen credit cards is not a new issue, so the very first thing to do when a person misplaced his/her credit card is to report to your card issuer. There are also cases in which a credit is stolen and being used, in this case, the card owner should report the fraudulent use to the credit reporting agencies and also create a fraud alert. When someone’s credit card gets stolen, a report should be done within 2 days. Usually, you can call the number on the back of your card to contact your issuer.
Actions are taken after a report of stolen Card
The card company after receiving a report on a lost or stolen card, will then go ahead to cancel or terminate the card and then send you a mail abt a new one, this process will have no effect on your credit report. Immediately you receive your new card, there are tips to follow to prevent identity theft from occurring in the future.
What effect does a new card issued to you have on your credit report?
Just like the report you made on your stolen card, in the same way, a re-issued card will be reported to the credit reporting agencies. With the same credit limit, balance, and history. A credit card company could report the re-issued card as a new account, with a new open date.
It will automatically reduce the average length of one’s credit card history and can have a negative impact on your credit report because the FICO® Score counts the average length of credit history as 15% of your total score. You are encouraged to keep a close check on your credit reports after you get a card re-issued to see if you are affected. Contact your credit card company if you are concerned about this and to possibly get the situation reversed.
Get more information on the content of your credit report
The Fair Credit Billing Act Limits Your Liability
Cardholders under the Fair Credit Billing Act (FCBA) are protected from having to make payment the full cost of fraudulent credit card charges. The act limits your liability to $50, which means that’s the maximum amount you’re to pay to the bank if your card is stolen and being used without your permission before you made a report on the stolen card. If the report is made before any charges, you will not be held responsible for any of the charges.
Note that debit cards do not have these same protections as credit cards, so one may just end up losing money if your debit card is stolen or misplaced.