credit card fraud
Unauthorized use of a credit card or card information to make purchases or obtain funds.
Example
“Credit card fraud resulted in $2,400 in unauthorized charges that were reversed within 48 hours.”
Memory Tip
FRAUD — unauthorized use. Report immediately. Zero liability protects most cardholders.
Why It Matters
Credit card fraud can damage your credit score, result in unauthorized charges you must dispute, and compromise your financial security. Understanding this risk helps you protect your personal information and monitor your accounts for suspicious activity that could affect your financial health.
Common Misconception
Many people believe they are responsible for all fraudulent charges on their credit card, but federal law limits your liability to $50 if you report the fraud promptly. Most credit card companies actually offer zero liability protection, meaning you do not pay anything for unauthorized transactions if you act quickly.
In Practice
Sarah notices three charges totaling $1,250 on her credit card statement from a retailer she never visited, likely from stolen card information used online. She contacts her credit card company immediately to dispute the charges, receives a temporary credit while they investigate, and gets a new card issued within a week to prevent further unauthorized use.
Etymology
From Latin 'fraus' meaning deceit applied to unauthorized credit card use.
Common Misspellings
Check your credit score free — no impact
Related Terms
More in credit
Other credit terms you should know
See Also
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