If your credit card is stolen and the thief makes purchases totaling $1,500, but you notify the card issuer as soon as discovering the card is missing, what is the maximum amount you are legally required to pay under Federal law?
1. $500
2. $50
3. Nothing
4. $1,000
Answer:
2. $50
Under the Fair Credit Billing Act (FCBA), $50 is the most you can be held responsible for under federal law if your credit card is lost or stolen and you act quickly to notify the issuer. Credit cards provide broader safeguards than debit cards, which are regulated under the Electronic Fund Transfer Act (EFTA), making them a safer choice for online shopping and significant purchases.
