Credit card fraud is when someone uses your card number, expiration date, or other account details to make purchases or withdrawals without your permission.
The fraudster may have obtained your information through a data breach at a retailer, a skimmed card at an ATM, a phishing email, or simply by stealing a physical card. Once they have the details, they can make charges online, by phone, or in person. The fraud might show up on your statement within hours, or it might take weeks before you notice.
The key point: you are not responsible for fraudulent charges once you report them. Federal law limits your liability to $50 if you report the fraud before the card is used, and $0 if you report it after unauthorized charges appear on your statement. Your card issuer — the bank or credit union that issued the card — handles the investigation and reversal.
Key Takeaways
- Fraudsters obtain card details through data breaches, skimming devices, phishing, or physical theft, then use them to make unauthorized charges.
- You are liable for no more than $50 in fraudulent charges under federal law, and often $0 if you report the fraud promptly.
- Contact your card issuer immediately when you spot unauthorized charges — most have a fraud hotline on the back of your card or in your online account.
- Your issuer will investigate, reverse the fraudulent charges, and send you a replacement card with a new number within 7 to 10 business days.
- Monitoring your statements monthly and setting up transaction alerts reduces the time between when fraud occurs and when you catch it.
How Fraudsters Get Your Card Information
Data breaches at retailers and payment processors are the most common source. When a store's payment system is compromised, hackers can steal thousands of card numbers at once. Retailers like Target and Home Depot have experienced breaches that exposed millions of cards. You may not know your card was compromised until fraudulent charges appear.
Skimming is a physical method: a device attached to an ATM, gas pump, or card reader captures your card number and PIN when you swipe or insert your card. The fraudster retrieves the device later and uses the stolen data. Chip readers and contactless payments reduce skimming risk because the data they capture is harder to use.
Phishing emails and texts trick you into entering your card details on a fake website or into a fraudulent form. The message may claim your account is locked, your payment failed, or you have won a prize. Legitimate companies never ask for full card numbers, expiration dates, or CVV codes via email or text.
Physical theft of your card is straightforward: someone steals your wallet, purse, or mail. A lost or stolen card can be used immediately at stores or online. This is why reporting a lost card within hours matters — it stops the fraudster before they make charges.
What Happens When You Report Fraud
Call the fraud department number on the back of your card or log into your online account and report the unauthorized charges. Most issuers have a 24/7 fraud line. You will need to confirm your identity and describe which charges are fraudulent. The issuer will ask whether you recognize the merchant, the amount, and the date.
Once you report the fraud, the issuer will freeze or cancel your card immediately to stop further unauthorized use. They will reverse the fraudulent charges from your account — this usually takes 5 to 10 business days, though the issuer may credit your account temporarily while they investigate. You will receive a replacement card with a new number within 7 to 10 business days.
The issuer's fraud team investigates by contacting the merchant where the fraudulent charge occurred. They request transaction records, receipts, and security footage to confirm the charge was unauthorized. If the merchant cannot prove you made the purchase, the charge is reversed and the merchant absorbs the loss.
You may be asked to sign a fraud affidavit — a sworn statement that you did not authorize the charges. This is a standard part of the investigation and protects you legally. The issuer uses this document if the merchant disputes the reversal.
Your Legal Protection Against Fraudulent Charges
The Fair Credit Billing Act (FCBA) is the federal law that protects you. Under the FCBA, your maximum liability for fraudulent charges is $50 — but only if you report the fraud after unauthorized charges appear on your statement. If you report a lost or stolen card before it is used, you have zero liability.
Most card issuers go further and offer zero-liability fraud protection, meaning you pay nothing regardless of when you report the fraud. Check your cardholder agreement or call your issuer to confirm their policy. Some issuers limit zero liability to cards issued in the United States or to fraud reported within a certain timeframe, so the details matter.
Your liability does not increase based on how many fraudulent charges appear or how much time passes before you notice. A $5,000 fraud is treated the same as a $500 fraud — you still owe no more than $50 under federal law.
Fraudulent Charges vs. Disputed Transactions
Fraud and a disputed transaction are different. Fraud is when someone else uses your card without permission. A disputed transaction is when you authorized the charge but have a problem with it — the merchant charged you twice, the item never arrived, or the service was not as described.
For fraud, you report it to your card issuer's fraud department. For a disputed transaction, you file a chargeback through your issuer's customer service or dispute resolution process. Both result in an investigation and potential reversal, but the path and timeline differ. Fraud investigations often move faster because the issuer knows you did not authorize the charge.
If you return an item to a merchant but the refund never posts to your card, that is a disputed transaction, not fraud. Contact the merchant first to confirm they processed the return. If they did but your card was not credited, then contact your issuer to dispute the charge.
Steps to Take Immediately After Discovering Fraud
Call your card issuer's fraud line right away — do not wait until business hours if the fraud occurred on a weekend. The sooner you report it, the sooner the card is frozen and the investigation begins. Have your card in front of you and be ready to describe the fraudulent charges.
Request a written confirmation of your fraud report. The issuer should provide a reference number, the date you reported it, and a summary of the fraudulent charges. Keep this documentation in case you need to dispute something later or if the issuer's investigation takes longer than expected.
Check your credit report for accounts you did not open. If a fraudster has your personal information, they may try to open new credit cards or loans in your name. You can order a free credit report from each of the three major bureaus — Equifax, Experian, and TransUnion — at annualcreditreport.com. Review the accounts listed and dispute any you do not recognize.
Consider placing a fraud alert or credit freeze with the three bureaus. A fraud alert tells creditors to verify your identity before opening new accounts in your name. A credit freeze blocks creditors from accessing your credit report entirely, which prevents new accounts from being opened without your permission. Both are free and take a few minutes to set up online.
How to Reduce Your Fraud Risk
Monitor your statements monthly — either by reviewing your paper statement or logging into your online account. Many people check their statements only when the bill arrives, which means fraud can go undetected for weeks. Monthly checks catch unauthorized charges quickly.
Set up transaction alerts through your card issuer's app or website. You can receive a text or email notification for any charge over a certain amount, or for any charge at all. Alerts let you spot fraud within hours instead of days or weeks.
Use chip readers instead of swiping your magnetic stripe when possible. Chip technology encrypts your card data, making it much harder for skimmers to use stolen information. Contactless payments (tapping your card or phone) are even more secure because your full card number is never transmitted.
Do not share your card details via email, text, or phone unless you initiated the contact and you are certain you are speaking to your card issuer or a trusted merchant. Legitimate companies never ask for your full card number, expiration date, or CVV code through unsecured channels.
Shred documents with your card number, account number, or personal information before throwing them away. A fraudster can use old statements or pre-approved credit offers to piece together enough information to open accounts in your name.
What Happens to Your Credit Score During a Fraud Investigation
Fraudulent charges do not damage your credit score because they are not legitimate debt. Once you report the fraud and the issuer reverses the charges, your account returns to its normal state. The fraudulent charges are removed from your statement and do not appear on your credit report.
However, if the fraud goes undetected for a long time and the fraudster makes large charges, your account balance may spike temporarily. A high balance relative to your credit limit can lower your credit score. Once the charges are reversed, your balance drops and your score recovers.
If a fraudster opens new accounts in your name and those accounts fall behind on payments, your credit score will suffer. This is why checking your credit report and placing a fraud alert or credit freeze is important — it prevents new fraudulent accounts from being opened.
Frequently Asked Questions
Can I be held responsible for fraudulent charges if I did not report them right away?
Under federal law, your liability is capped at $50 even if you report fraud weeks later. Most card issuers offer zero-liability protection, meaning you pay nothing. Check your cardholder agreement or call your issuer to confirm their specific policy, as some have time limits or conditions.
How long does it take to get my money back after reporting fraud?
Your issuer typically credits your account temporarily within 1 to 3 business days while they investigate. The full reversal usually posts within 5 to 10 business days. If the investigation takes longer, the issuer must keep the credit in place while they gather evidence from the merchant.
What if the fraudster used my card at a store in person?
The merchant's security cameras and transaction records will show whether the person who made the purchase matches your description. If you can prove you were not at that location, the charge is reversed. The merchant absorbs the loss, not you.
Do I need to file a police report for credit card fraud?
Filing a police report is not required to get your money back from your card issuer. However, if the fraud involved identity theft — such as opening new accounts in your name — a police report creates an official record that helps with credit disputes and fraud alerts. You can file a report online or in person at your local police department.
Can I use my card while the fraud investigation is happening?
No — your card is frozen or canceled immediately when you report fraud. You will receive a replacement card with a new number within 7 to 10 business days. Until then, you can use other payment methods or contact your issuer to request a temporary card number for online purchases.