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What to Do When Your Credit Card is Stolen

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Last week I was shocked to log into my credit card account and see an $11,000 balance. My wife and I had recently done some furniture shopping and home improvements for our new house, but I know we hadn’t spent that much!

It took me about 30 seconds to realize something was very wrong – almost $7,000 had been spent in one day on tickets to sporting events and similar purchases. Someone stole my credit card number.

I don’t know how it happened -  the card never left my physical possession and I only shop on trusted websites. I have checked my other cards and haven’t found anything suspicious, nor have I seen any indications of identity theft or fraud with any of my other financial accounts. In the end, I was lucky. I was able to alert my credit card carrier and they removed the fraudulent charges from my account and sent me a new card right away. Here is what I learned from the situation.

What to Do When Your Credit Card is Stolen

stolen-credit-cardReport a Stolen Credit Card Immediately! Your liability is limited to $50 when your credit card is stolen, but you aren’t liable for any charges if only your credit card number is stolen (assuming you report it immediately). I experienced the latter situation – I never lost physical possession of my card. Since I reported the fraudulent charges as soon as I noticed them, I wasn’t held liable. You should take the same precaution if you lose your wallet. Cancel your card immediately, then sort the details out later.

Watch out for identity theft. Identity theft is one of the scariest crimes around because it can handcuff you for years, and it goes largely unnoticed. You should continue taking precautions against identity theft, such as shredding all documents before disposing of them, using anti-virus software and only shopping on legitimate websites. You may also wish to consider using a credit monitoring service to help alert you to changes in your credit profile.

Cancel all automatic payments. I love using automatic payments on my credit cards. They make life easier from a bill keeping perspective and make it easier to rack up the cash rewards. Unfortunately, it can be a great pain to manually reset all your automatic payments when you have to change credit cards and you run the risk of missing a payment if you don’t have a current list of automatic payments (which of course, I didn’t). I had a list of monthly payments, which was easy to assemble from past statements, but I didn’t have a list of vendors where I kept my card on file, such as Amazon, iTunes, the tollway system, etc. I’m still working on getting my new card on file for those locations.

Make sure you have a backup credit card. I stopped carrying a backup credit card because I was happy with my current card and I wanted to simplify things. So I only carried my main credit card, a business credit card, and my debit card. Unfortunately, that left me in a bind for a couple days and I had to use my debit card when I prefer using my credit card. So I’m officially shopping for a new credit card so I can have a backup on file at all times – just to avoid inconveniences such as this.

Credit cards offer more protections than debit cards

This situation is exactly why I primarily use credit cards instead of my debit card. In general, credit cards offer better protections than debit cards and won’t put you in a financial bind if your number is stolen. If a credit card thief maxes out your credit card, you can’t make any charges, but you won’t lose any money if you report it right away. But if a thief your steals your debit card number he can drain your checking account in short order. You will likely get the money back, but it could take days or even weeks while your bank investigates, leaving you in a bind until the situation is resolved. This isn’t a chance I’m willing to take. This is the primary reason I use my credit card for virtually all purchases, then pay the balance in full each month. More on comparing credit cards and debit cards.

Thoughts on Chase Bank’s Fraud Department

Finally, I’d like to share my experience with Chase Bank. The primary credit card I have used for the past 3 years is the Chase Freedom® Visa (see our Chase Freedom® Visa – $100 Bonus Cash Back review for more information about why this card rocks!). I contacted Chase’s fraud department at around 1 am on a Saturday morning, which is when I noticed the charges on my account. I informed the rep which charges weren’t mine and within a few minutes my old card was canceled, the credit bureaus were alerted that the card was canceled, and a new card was issued. I received the reissued card by noon on Tuesday, which is an amazingly quick turnaround, especially considering the day and time I called Chase. Chase made the process easy and this experience has left me an even more satisfied customer.

Have you ever experienced a stolen credit card or debit card? How did it turn out?

Photo credit: Don Hankins.


Published or updated April 20, 2012.
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{ 7 comments… read them below or add one }

1 krantcents

Yes, I was traveling and my credit card number was stolen and used. The credit card company (American Express) contacted me. It was canceled and reissued. I experienced a number of these situations. The credit card company always reacts well. I guess they want their customers to keep “charging”.

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2 Ryan

There is probably some truth to that statement… Credit card companies will only make money when people use the cards, so they don’t want their customers to fear using the cards.

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3 Jaren

This happened to me just last week while I was at work! My credit card is with BofA, who notified me immediately via email and phone that there has been suspicious activity on my card (no I didn’t order $300 worth of stuff on contactlenses[.]com). I immediately cancelled the card, BofA took care of the charges, but I didn’t think of cancelling the automatic payments I set up. Thanks for the reminder!

-Jaren

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4 Ryan

Sorry to hear about your experience. It’s definitely a good idea to cancel those automatic payments though, and route them through another card so you can continue making your payments on time!

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5 Jon

Sorry to hear about your experience! That is no fun. You definitely have to be careful when shopping online and in general. It is getting worse for sure.

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6 ross

I had my advertising account at yahoo hacked into about six months ago and there were $15,000 in fraudulent charges on my credit card. They conveniently did this in the last few weeks of december when everyone was on vacation. I had to wait a month, but i fortunately got everything back. Amex was pretty good about it. Was pretty scary though.

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7 Pat J.

About thiefs draining a checking account with a debit card number: I use American Express and a Mastercard Debit Card with Wells Fargo. I don’t keep much money in my Wells Fargo bank account, maybe $200. I use my Amex and debit card to go shopping. I have another debit card with another bank but I don’t use it. Thiefs can’t easily steal that debit card.

yes, i pay like $10 a month for Wells Fargo but they are the only bank near my house.

I can’t qualify for credit anyways. I don’t really need credit or rewards any ways. Just saying.

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