Credit card loss protection is a product that guarantees you a company will pay for any charges that may occur if you lose your credit card. If you have a credit card in your name, you may receive a letter in the mail or a phone call from an outside company trying to sell you credit card loss protection. However, most credit cards already have a loss protection policy in place, and once you understand how your card’s policy works, you will see that you really do not need to purchase additional credit card loss protection.
What Happens If My Credit Card Is Lost or Stolen?
Credit card issuers have a policy that you need to report your credit card as lost or stolen within 24 hours of realizing that it is missing. Once you realize that your card is gone, you should call your card issuer on the phone and report this. It will put a freeze on the card and then have you examine the last few charges on the card to see if they are ones you authorized or not.
Most credit card issuers are willing to go back and reverse charges that appear on your statement for up to two months, because they realize you may not know that your credit card number has been compromised until you receive your statement. This is why you need to check your statement each month. The policy is that you are only responsible for the first $50 of fraudulent charges.
Is Credit Card Loss Protection Worth It?
Since credit card issuers are working so hard to protect you in the event that your credit card goes missing, you do not need to purchase additional credit card loss protection. As it is, if you do purhcase this product, generally you will end up paying more than the $50 you would owe if fraudulent charges were run up on your card.
If you get a phone call from a sales representative for a company offering credit card loss protection, that person will likely try to use scare tactics and stress how much you could owe if your card were stolen. However, if you are regularly checking your credit card statement and calling in any suspicious activity, you will not be held liable for excessive fraudulent charges, which makes credit card loss protection a waste of your money.
What Should I Do if My Credit Card Is Stolen?
Many credit card issuers will freeze your account or contact you if they see charges or activity atypical for your credit card. Often this is how a person realizes their card has been stolen. You may then realize that your wallet has been stolen, and then you will need to call the card issuer. It is best to write the contact number for your card issuer on a piece of paper or to store it in your phone so that you can call them as soon as you realize your card is definitely gone. In this situation, you will also need to file a police report to verify that your wallet has been stolen.
Your credit card issuer will review the last few charges with you, put a freeze on your account if they haven’t done so already, and issue you a new card. This will happen very quickly, and you should have your new card in just a few days. The ease of the entire process is yet another reason why extra credit card loss protection is unnecessary.