Credit card issuers offer many perks for their customers, but one of them is peace of mind. Cards often provide some protections against thieves and unauthorized charges.
Capital One’s CreditWise and Chase’s Credit Journey, for example, offer cardmembers—and non-cardmembers—free credit monitoring. The services track your Social Security number, scan the “dark web,” and send alerts about credit inquiries or new accounts. Both services also let you keep up with changes in your credit score. Mastercard holders can sign up for the card network’s identity-theft protection service for free.
You can also cover your smartphone with cell-phone insurance. These policies typically come with a deductible of up to $50 or more, and there are limits on how many claims you can submit. Chase’s Freedom Flex, for example, offers coverage up to $800 per claim with a $50 deductible for a stolen or damaged phone; you must pay your monthly bill with your eligible card to qualify. You’re allowed to make two claims in a 12-month period.
Perhaps the most valuable benefit of all is security against credit card fraud and unauthorized charges. Credit card fraud dropped slightly in 2021, but still nearly 390,000 consumers reported cases of it to the Federal Trade Commission, the agency said.
Under the Fair Credit Billing Act, if someone uses your credit card fraudulently, federal law limits your liability to $50. American Express, Discover, Mastercard and Visa assume all liability for unauthorized purchases.
For extra protection, some credit card issuers allow you to disguise your card number with a virtual number. Most Capital One and select Citi cards offer this feature, which randomly generates virtual numbers that are linked to your credit card.
For online shopping, a credit card’s limited liability is essential because data breaches are an ever-present danger. If your debit card number (but not the card itself) is stolen, you must report the fraud within 60 days of your bank statement being sent to you to avoid liability. If the debit card is physically stolen, your liability is capped at $50 if you report it within two days. Notifying your bank between three and 60 days after the fraud occurred could increase your liability to $500, and beyond 60 days your losses could be unlimited.
(Rivan V. Stinson is a staff writer at Kiplinger’s Personal Finance magazine. For more on this and similar money topics, visit Kiplinger.com.)
