Under the Fair Credit Billing Act (FCBA) the most you can be held liable for when your credit card has been stolen is $50. However, if you report the loss before your card has been used (or the fraudulent charges involve your credit number and not the card itself) under the FCBA you are not liable at all and do not have to pay the card issuer any money. But if a thief uses your card before you are able to report it missing, the most you will be liable for is $50.
It is a good idea to watch your billing statements carefully in the months after your credit card goes missing. If any charges appear that you did not make, be sure to contact the card issuer by phone and in writing. When you write your card issuer, be sure to point out the charge, the date when your card went missing, and the date you first reported the card missing.
On the other hand, if you lose your debit card or it is stolen, there are much higher liabilities. The liability rules are different for debit card and ATM cards than credit cards, and they depend mostly on when you report your card loss. If you report your debit card as missing before any charges have been made, then you will not be liable for any charges that may be made with it. If you report it two days after you notice it is lost or stolen you only will be liable for up to $50 dollars worth of charges made. However, if you do not report the card between 2-60 days you can be liable for up to $500 worth of loss, and if you do not report before 60 days of your card being missing then your liability is unlimited. This means all of the money in your bank account could be lost and unrecoverable.
No matter what type of cards you may have, it is good to keep track of them at all times. If you notice one is missing or has charges on it you did not make remember to call the card issuer as soon as possible! This is the best way to reduce your liability.
Written by Jenny Vroman and Sarah McGinniss, Peer Educators, Financial Wellness Program, University of Illinois Extension, 2010.