What to Do When Credit Cards Are Lost or Stolen

Credit cards, ATM cards, and debit cards provide a high level of convenience for people, but if they are lost or stolen, the effects can be drastic. If you experience a loss or theft of credit cards, ATM cards, or debit cards, immediately report them to the credit card issuing companies. In addition, follow up your calls with letters detailing all critical card information including your account number, the date the credit card was missing, and the date the loss was reported.

Fortunately, a cardholder’s maximum liability for unauthorized use of a credit card is $50. If you report the loss before your credit cards are used, you have no responsibility for any unauthorized charges. Liability for unauthorized use of ATM or debit cards depends on how quickly the cardholder reports the loss. Losses can be heavy for ATM or debit cardholders if they are not reported in a timely manner.

Individuals who have reported credit cards lost or stolen should carefully review billing statements and report unauthorized charges to the card issuer along with all pertinent card information. Unauthorized transactions for ATM or debit cards will appear on bank statements, and should be reported to the bank that issued the card.

Prevent credit card fraud by always keeping the cards in a safe place, using an obscure Personal Identification Number (PIN) for ATM and debit cards, and memorizing your PIN. Never use your birth date, phone number, or social security number or any other easily determined number or word as your PIN.

The best way to keep your credit cards, ATM cards, and debit cards safe.

There are a few steps that you can take to prevent unauthorized use of the cards:

• Only disclose your credit card or ATM card account number over the telephone if it is to a reputable company.
• Never put your credit card account number on the outside of an envelope or on a postcard.
• Draw a line through blank spaces on charge or debit slips above the total so the amount cannot be changed.
• Destroy card carbons and save receipts to check against monthly statements.
• Cut up old cards - cutting through the account number - before disposing of them.
• Open monthly statements promptly and compare them with receipts.
• Keep records of your cards’ account numbers, expiration dates, and the telephone numbers of each card issuer in a safe place.
• Carry only the cards you expect to use.
• Never carry your ATM or debit card PIN in your wallet or purse.
• Do not write your PIN on the card or anyplace where it might be seen.
• Check account activity frequently especially if you bank online.

A number of federal agencies enforce the laws that govern credit card and ATM or debit card transactions. Questions concerning a particular card issuer should be directed to the enforcement agency responsible for that issuer.

Why Some Businesses Still Don't Take Credit Cards

It seems like credit cards are accepted nearly everywhere and for payments of all sorts nowadays. The majority of mid-sized and large companies accept credit card payments, with fast food restaurants like McDonald's even allowing customers to charge orders of as little as $2. But there are still those businesses where you simply cannot pay by plastic.

For many of these places, credit cards represent processing fees, equipment costs, and additional time to complete transactions that they just don't want to take on.

Some of the businesses offering merchandise or services that are relatively inexpensive would have to raise costs if they accepted credit card payments. These merchants explain that they are trying to keep from passing on the cost of credit cards to their customers.

But other businesses acknowledge that they themselves do not want to pay credit card processing fees, especially when business is tough. Businesses are charged between a quarter of a percent and 5% on each credit card transaction in what are known as interchange fees. Merchant banks pay those fees to card issuing banks, and merchants pay the fees as part of the fees charged by their banks.

Certain businesses note that the cost of renting and repairing credit card terminals, in addition to processing fees, mean they do not do enough transactions to make accepting credit cards worthwhile.

Another reason businesses may opt not to take plastic is because credit cards create a paper trail that makes it more difficult to hide income. These businesses may be trying to keep earnings from the eyes of the Internal Revenue Service.

Less dubiously, the merchant may simply find taking credit cards to be a hassle or impractical.

Whatever their reason, there is intense pressure for businesses to take credit cards. Merchants may allow you to pay by credit card even when they would prefer not to because of their fear of alienating or losing customers, according to a survey conducted by the Association for Financial Professionals.

To reduce interchange fees, some business owners only take credit cards with the lowest fees and will not take reward credit cards, which have incentives that the merchants help fund. Other merchants may require a minimum credit card purchase amount to offset some of the cost of the fees -- although MasterCard and Visa forbid such minimum charge requirements.

Experts note that some businesses have greater leverage in requiring cash payments, with the sale of more unique services or goods giving the business owner more power to only accept cash. Meanwhile, the credit card companies have worked to appeal to less distinctive businesses by lowering interchange fees for those merchants that have small fraud risk, like grocery stores, fast food restaurants, movie theaters, and dry cleaners.