THE RIGHT ACTION REQUIRED IN CASE OF A LOST CREDIT CARD

Panic sets in when you realize your wallet and the personal information it contains has been stolen or lost. But once the initial panic has passed, it's time to take action to protect you from the potential of identity theft; time is of the essence.

Don't Worry - You're Protected

Thanks to Federal laws and financial policies, losing your credit cards doesn't mean extensive losses to your bank account or damage to your credit score. Federal law caps your liability at $50 in such an event, but most credit card companies have a $0 liability clause, if you call within 24 hours of the loss. If a thief uses your card before you report it missing, the most you will owe for unauthorized charges is $50.

If you report the loss before your credit card is used, the card issuer cannot hold you responsible for any unauthorized charges. And if you report fraudulent activity within 60 days from the first billing statement it appeared on, you won't be responsible for any of the charges above $50. Also, if the loss involves your credit card number, but not the card itself, you have no liability for unauthorized use.

Make Sure You Take Action

It's critical that you report the loss or theft of your credit card to the card issuer, as quickly as possible. And remember, it's much easier and less traumatic to cancel an account, then to risk the hassle of a thief running amok with your credit card and racking up thousands of dollars of debt on your account.

If you notice questionable charges on your statement, call your credit card company immediately to begin an investigation. Many companies have toll-free numbers and 24-hour service to deal with such emergencies. Contact the fraud department and be prepared with your account number and the date when you first noticed your card was missing. Be sure to get the name of the representative you speak with and any reference numbers that may apply.

Follow up with by a letter to the address provided for billing errors explaining the situation. Do not send it with a payment - or to the address where you send your payments - unless directed to do so. The credit card company has 60 days to report the results of their investigation.

To protect your cards from theft or loss and protect yourself from personal loss, consider the following tips:

Keep all your credit cards, whether active or inactive, in a secure place. Include a list of all account numbers and company contact information including emergency and customer service phone numbers to be used if your card is lost or stolen.

Make a photocopy of all of the information in your wallet, and keep it in an easily accessible safe place. Be sure to photocopy the back sides of cards - they often contain information for reporting lost or stolen cards, or disputed transactions.

Never carry more than the credit or debit cards you plan to use. When they're not in your wallet, keep them in a secure place.

Protect your account number by never writing it on a check or envelope. Never give your number to an unsolicited phone caller but only to reputable companies for a specific purchase.

Destroy carbons and receipts after reconciling them against the monthly credit card statement.

Cut through all account numbers and magnetic strips when discarding old cards.

After a loss, review your billing statements carefully.