A lost or stolen credit card should not hurt your credit score as long as you take the proper steps as soon as you realize your card is missing. Early detection is key to avoiding financial impact. Being proactive helps protect yourself from the harmful effects a lost or stolen credit card can have on your credit report and score.
Key Takeaways
- Replacing a lost or stolen credit card does not hurt your credit score.
- The credit card account's history and other information is simply transferred to a new account and you can get a new card.
- Most credit card issuers will not hold the cardholder responsible for fraudulent charges.
- A stolen or lost credit card can hurt a consumer’s credit score if the card is used and the cardholder doesn’t report the fraud and then fails to pay the charges.
- Review your credit report regularly to monitor for signs of fraud.
How Does a Lost or Stolen Credit Card Affect Your Credit?
When you replace a lost or stolen card with a new one, your credit card company will simply transfer your information, including your account open date and transaction history, to a new account number. Your credit score will not be affected.
The length of time your accounts have been open, which is one factor used to determine your score, will not change.
Fraudulent Charges
One threat to your credit is that the person who steals your card or finds your lost card uses it. Because your name is on the account, you could be responsible for any balance that accumulates. However, most credit card issuers will not hold the cardholder responsible for fraudulent charges if you report the card missing.
If you fail to alert the card issuer and do not pay the balance, this gets reported to the credit bureaus and lowers your score.
Automated Payments Not Transferred
Your credit score may also suffer if you fail to transfer automatic monthly payments to your replacement card number. Gym memberships, utility bills, and monthly subscription charges may get declined if they are made to the old card number.
Declined charges may be placed with a collection agency. Most collection agencies report to the credit bureaus and collection accounts are considered derogatory on a credit report, lowering your credit score.
Another scenario that could lower your credit score with a lost credit card, albeit infrequent, is the credit card company declines to issue a new card.
A lost or stolen card sometimes triggers an account review. If the credit card company notes delinquent payments or a lower credit score, you may no longer qualify for their credit. A closed credit card would hurt your credit by removing an account from your report, potentially lowering your available credit and length of credit history.
If your credit card is stolen in the U.S., the Fair Credit Billing Act limits your liability to $50, regardless of the amount charged by an unauthorized user. If just the credit card account number is stolen and the theft is reported before any charges are made, federal law guarantees that the cardholder has a zero liability to the issuer.
What To Do When Your Credit Card Is Lost or Stolen
You can limit the damage of a lost or stolen credit card and avoid a negative impact on your credit score by taking the following steps:
Contact the credit card company
Contact you credit card company as soon as you realize your card has been lost or stolen. The more quickly you cancel the card, the less time anyone has to use it.
Review the recent transactions made on the card. For any transactions not made by you, you can dispute them. Often, you will not be held responsible for paying them, and they do not get reported to the credit bureaus.
Also verify with the credit card company how it reports replacement cards to the credit bureaus. Most of the major companies such as American Express, Bank of America, Capital One, and Chase, have stated policies that they merge the new account with the old one for credit reporting purposes.
Update all automatic charges
Make a list of every automatic payment assigned to the card that was lost or stolen. Note the date each payment is set to apply to your card. You might have to make payment arrangements with merchants regarding payments because it can take anywhere from a few days to a week or more to receive a replacement card,
For the others, contact merchants the day you receive your new card. Explain the situation, and ask them to delete the old card number and set up future payments to deduct from your new card. You can often change your automated payments online.
Remember to update not only your monthly automatic payments, but also any automated payments made quarterly, biannually, or annually.
Monitor Your Credit Report
Early detection is key for handling threats to your credit report. Monitor your credit report closely. The law requires the credit bureaus to allow you to review your full credit report once per year for free. You can get a copy of your credit report at AnnualCreditReport.com.
Keeping tabs on your credit report, especially after having a card lost or stolen, gives you peace of mind. Report any errors you see to your creditors as soon as possible.
What Do I Do If I Lost My Credit Card?
When you discover you lost your credit card, report it missing to your credit card company immediately. Then, monitor your credit card statements for any purchases you did not make. If you see a charge that wasn't yours, report it to your credit card company.
Can Anyone Use my Lost Credit Card?
Once you have reported your credit card lost, no one can use it. Your credit card company will terminate that account and transfer your account to a new one.
Does It Cost Money to Replace a Lost Credit Card?
In most cases, you can get your lost credit card replaced for free. Your credit card company will send you a replacement card in the mail. It will likely have a new account and security number.
The Bottom Line
When you lose your credit card, you can avoid an impact to your finances by reporting the card lost or missing immediately. In general, a lost or stolen credit card will have no impact on your credit score. In most cases, you will not be held responsible for charges on a lost or stolen card.
