Federal law limits your fraud liability to $50. Most cards offer $0. Here's what you need to know.
Maximum federal liability: $50 per credit card (under the Truth in Lending Act)
Actual liability with most issuers: $0 — all major card issuers offer zero liability protection
If reported before charges: $0 — you have no liability if you report loss/theft before any unauthorized use
Key requirement: You must report unauthorized charges within 60 days of your statement date to maintain full FCBA protections.
Your liability for unauthorized credit card charges is governed by two federal laws:
TILA limits cardholder liability for unauthorized use of a credit card:
The FCBA provides the dispute process for billing errors, including unauthorized charges:
Under TILA, unauthorized use means a transaction made by someone other than you, without your actual, implied, or apparent authority. This includes:
If you authorized someone to use your card (spouse, child, employee), you're liable for their charges — even if they exceeded your permission. TILA protection only covers truly unauthorized use by third parties.
While federal law limits your liability to $50, virtually all major card issuers offer $0 liability protection for unauthorized transactions. Here's what each issuer offers:
| Card Issuer | Zero Liability Policy | Coverage | Conditions |
|---|---|---|---|
| Visa | ✅ $0 Liability | All Visa credit and debit cards | Must report promptly; certain commercial cards excluded |
| Mastercard | ✅ $0 Liability | All Mastercard credit and debit cards | Must report unauthorized use promptly |
| American Express | ✅ $0 Liability | All Amex cards | Fraud Protection Guarantee; must report promptly |
| Discover | ✅ $0 Liability | All Discover cards | 100% fraud protection guarantee |
| Chase | ✅ $0 Liability | All Chase credit cards | Auto-enrolled; no additional action needed |
| Citi | ✅ $0 Liability | All Citi credit cards | Identity Theft Solutions included |
| Capital One | ✅ $0 Liability | All Capital One cards | Auto-enrolled fraud alerts |
| Bank of America | ✅ $0 Liability | All BofA credit cards | $0 liability guarantee |
| Wells Fargo | ✅ $0 Liability | All Wells Fargo cards | 24/7 fraud monitoring |
| US Bank | ✅ $0 Liability | All US Bank credit cards | Must report unauthorized use |
If you have a major credit card, you almost certainly have $0 liability protection automatically — no enrollment required. Just report fraud promptly and follow the dispute process.
Follow these steps to dispute unauthorized charges and protect your rights:
Call the number on the back of your card or log in to your online account. Most issuers have 24/7 fraud hotlines. Report:
What happens: The issuer will typically freeze your card, issue a new number, and provisionally credit the disputed amount within 24-48 hours.
Send a written dispute letter via certified mail to preserve your FCBA rights. Include:
Mail to: The "billing inquiries" address listed on your statement (not the payment address).
If you've lost hundreds or thousands of dollars, file a report with your local police department. This creates an official record and may be required for identity theft recovery.
The FTC's IdentityTheft.gov creates a personalized recovery plan and pre-filled forms for creditors and credit bureaus.
Contact one of the three credit bureaus (Equifax, Experian, or TransUnion) to place a free fraud alert. The bureau you contact must notify the other two.
Use this format for your written dispute:
Send via certified mail with return receipt requested — this proves you met the 60-day deadline.
Credit cards offer far superior fraud protection compared to debit cards. Here's why:
| Aspect | Credit Card | Debit Card |
|---|---|---|
| Maximum liability | $50 (usually $0) | $50, $500, or unlimited (based on timing) |
| Liability if reported within 2 days | $50 maximum | $50 maximum |
| Liability if reported within 60 days | $50 maximum | Up to $500 |
| Liability after 60 days | $50 maximum | Unlimited (could lose entire account balance) |
| Money during investigation | Not paying (it's credit) | Gone from your account (it's your money) |
| Investigation timeline | Up to 90 days | 10-45 days depending on circumstances |
| Governing law | TILA/FCBA | Electronic Fund Transfer Act (EFTA) |
With a debit card, your actual bank account money is gone while the fraud is investigated. With a credit card, it's the issuer's money at risk — not yours. For online shopping and gas pumps, always use a credit card for superior fraud protection.
When a merchant reports a data breach affecting your card:
Watch for any unauthorized charges. Most issuers proactively notify affected cardholders and issue new cards.
If your issuer sends a new card, activate it and update your recurring payments. If they don't send one, request a replacement.
For major breaches (Equifax, Capital One, etc.), consider a fraud alert or credit freeze.
Some class action settlements allow you to claim reimbursement for fraud losses. Check the settlement website.
If fraudulent debt is being collected against you, our free Debt Validation Letter Generator forces collectors to prove the debt is yours.
Generate Free Letter →