What to Do If Your Credit Card Is Stolen

Credit-card theft is, unfortunately, a common crime. According to the Bureau of Justice Statistics, 8.6 million Americans were victims of credit-card fraud in 2014.

Credit: Tom's GuideCredit: Tom's Guide

With so many businesses and websites having access to consumer credit-card information — and major data breaches becoming increasingly common — it's important to be vigilant and to know what to do in the event your credit-card numbers, or the cards themselves, are stolen.

Here are six steps you can take to get you started in the event your credit cards are stolen or compromised:

1. Don't panic!

Take a deep breath. There are numerous protections in place for credit-card theft that limit your liability, so the chances that you'll be responsible for paying any of the fraudulent charges are pretty slim. (You have less protection with debit cards.) The key is to act quickly. If you think there's even a chance that your credit-card information has been compromised, report it immediately.

2. Contact the card issuer

Whether you have a credit card or a debit card, the first thing you'll want to do is call your card issuer and let it know the card was stolen or the number compromised. It will put a block on the card number, meaning that any transactions attempted with it going forward will be denied. If the stolen card hasn't been used yet, you're in luck — canceling the number should largely take care of the problem.

If the card has been used, however, reporting the card as stolen will limit your liability with regard to any fraudulent charges.

MORE: Identity Theft vs. Credit-Card Theft: What's the Difference?

With a credit card, if only the card number is stolen, and not the physical card itself, federal law states that you can't be held responsible for any unauthorized charges. If the physical card is stolen, the most you'll be on the hook for is $50, and card companies often will let this go as a gesture of good faith.

With a debit card, your liability is greater. If your debit card is tied to a bank account, the thief may clean out the account, and the bank may not recompense you.

The key here is speed. Report the lost or stolen card immediately. You won't be financially responsible for fraudulent purchases, but if the fraud is far-reaching, it can become quite a headache sorting things out and can cause havoc on your credit reports. If you can block the account before the thief has a chance to use the card, you can prevent all of this.

"The most important thing for a consumer to do when they discover that a credit card has been stolen is to act fast," said Jen Grondahl Lee, bankruptcy attorney and co-author of Preventing Credit Card Fraud: A Complete Guide for Everyone from Merchants to Consumers (Rowman & Littlefield, 2017).

"Report to the credit card issuer immediately, file a police report, and start an organized file to keep track of all the documentation," Lee said. "The biggest issue I see with my clients is that there are so many steps to fixing the problem that victims get overwhelmed by the details involved and spend a significant amount of time frustrated with the process."

3. Put a fraud alert on your credit report

The next thing you'll want to do after alerting your card issuer is to place a fraud alert on your credit report. Get in touch with one of the big three credit-reporting companies — Equifax (1-888-766-0008), Experian (1-888-397-3742) and TransUnion(1-800-680-7289) — and let the company know you're the victim of identity theft. (Yes, credit-card theft is identity theft.) You need to contact only one company — it is required to inform the other two about the alert.

The fraud alert will make it more difficult for an identity thief to open additional accounts in your name. Any credit issuers will need to contact you before approving the new credit, letting you know that someone is attempting to use your identity.

A fraud alert is free, lasts 90 days and can be renewed indefinitely.

MORE: Best Online Identity-Theft Protection Services Tested

4. Check your credit report

When you place a fraud alert on your credit report, you'll get a free copy of the report from each of the three big credit-reporting companies. Take advantage of this opportunity to read over your reports and survey any damage done.

Be on the lookout for accounts that you don't recall opening or charges for things you didn't purchase. These are sure signs that someone has been using your identity. If you find anything out of the ordinary, take it seriously and move on to step five.

5. Create an identity-theft report with the FTC

The Federal Trade Commission website at IdentityTheft.gov will help you create a report that can be used as proof that your identity was stolen and guarantees you certain rights. The website also has detailed steps and checklists for you to follow, and can provide you with a recovery plan.

It will guide you through the process of closing any unauthorized accounts and removing fraudulent charges from your accounts or credit reports. The site can also assist you in filing a police report if you'd like to find out who was responsible for the theft and possibly press charges.

MORE: What to Do After a Data Breach

6. Keep your guard up

As you work through the FTC's cleanup steps and get things back in order, keep a watchful eye on your credit reports and bank accounts. If any new charges or credit accounts appear, you'll want to handle them immediately, just as you handled the original theft.

It is also possible to place an extended fraud alert or credit freeze on your account if the damage continues or is particularly bad.

The extended fraud alert lasts for seven years and gives you two free credit reports from each of the major reporting companies in the first 12 months. It also requires your name to be removed from marketing lists for prescreened offers for five years. You can file an extended fraud alert with any of the three credit-reporting companies, but you'll need to have completed an Identity Theft Report with the FTC first.

A credit freeze is a drastic step, and costs at least a nominal fee to put into place. It won't let anyone even look at your credit report without your explicit approval, and may make it difficult to open even legitimate accounts. It may not be necessary in the case of simple credit-card fraud, but will help in cases of serious identity theft where someone is opening accounts in your name.

Credit-card fraud is no picnic, but it can be managed and recovered from. The key is to keep calm, act quickly and make use of all the resources and protections available.

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