One of the best things about a credit card is that it’s so small. You can take it with you anywhere, and it doesn’t take up much space. Just slip it in your pocket or in a wallet and it’s done. Unfortunately, the fact that it’s so small is also a downside. You can easily lose it and it can be stolen without you even noticing it. And these things can have very nasty consequences.
How a stolen or lost credit card can hurt you
You may think that, once someone else steals your card and starts to use it, you’re in trouble. This can be the case, but only if you don’t notice that you card is missing early on. If days and weeks go by without you reporting the lost or stolen credit card, then you’ll probably be in a little trouble. But if you report it immediately, you credit card company will cancel it and you’ll lose just the money that you have to pay for a new card.
If a thief makes purchases with your card, you can talk to your company and tell them that it wasn’t you who made those purchases. They can help you and you won’t have to pay for those things.
However, if you don’t report it immediately and the bad guy starts having fun with your card, it could end up hurting your credit score and your finances. The thief can either max the card, or you could miss payments. There are a lot of ways for your credit score to be hurt.
What’s the worst thing that can happen?
There are a lot of bad things that can happen when you lose a credit card or when it’s stolen. Remember, your name is on the account. If a thief uses the card, you will be responsible for any balance accumulated. If you don’t pay the balance, the negative info will be sent to the credit bureaus, thus lowering your score.
Additionally, you can also hurt your score if you fail to transfer automatic monthly payments to the replacement card number. It might sound funny, but it actually happens quite often, especially with utility bills and monthly subscription charges.
If you don’t make the necessary changes on time, these charges will go to a collection agency, which will in turn report them to the credit bureaus, lowering your score.
And there’s always the possibility that the credit card company won’t want to issue a new card to you. This can happen if your credit score is already really poor.
What to do when faced with such a situation?
If you notice that your credit card is lost, or if you think that it was stolen, you should contact your credit card company immediately, even before you contact the police. Tell them what happened and ask them to cancel the card.
The credit card company representatives will also review your recent transactions, so let them know if you notice something that shouldn’t be there. Finally, verify how the credit card company reports replacement card to the credit bureaus. Most companies have stated policies that they merge the new account with the old one for credit reporting purposes. This way, your score will not be hurt.
After you’re done with the credit card company, make a list of every automatic payment assigned to the lost or stolen card. Once you get the new card, make sure that you move these payments to it.
And don’t forget to monitor your credit report. You should do this monthly, or at least quarterly.