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What does $0 fraud liability mean? Here's a breakdown of credit card fraud protection terms

CNBC Select explains the different fraud protection programs card issuers offer so you can make sure you have the protection you need.

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When the American unemployment rate surged this year, financial experts warned consumers to stay on the lookout for an uptick in fraud.

In an economically scarce climate, hackers and scammers are more likely to attempt fraud like identity theft and phishing scams. And even everyday consumers are more prone to attempt an ambiguous form of scamming known as friendly fraud, which poses a troubling problem for already struggling small business owners.

Using a credit card that comes with top-notch fraud protection is one way to ease concerns. From complimentary credit monitoring to $0 liability, most major card issuers have made it standard to provide features that give you more protection than debit cards.

Below, CNBC Select explains the different fraud protection programs card issuers offer, so you can make sure you have the protection you need. The list is not exhaustive, so we recommend you search your card issuer's website to see a full list of its safety features.

Card issuers with $0 fraud liability

Under the Fair Credit Billing Act (FCBA), you can only be held liable for up to a maximum of $50 in the event of fraudulent charges on your credit card account, as long as you report it within 60 days. However, a number of major issuers take this a step further and guarantee zero liability with the caveat that you have to act quickly when something's not right.

Since zero-liability guarantees are dependent upon how fast you report fraudulent charges, many of the below issuers also offer 24/7 monitoring to watch for suspicious activity. Each issuer has their own parameters as to what's considered suspicious, but they usually flag the account when there are large purchases made far away from where you live, or a series of uncharacteristic purchases made back-to-back. Card issuers often send secure messages, text for a confirmation or sometimes even call the primary cardholder to verify that suspicious transactions are legitimate.

Below are three major card issuers who guarantee $0 liability.

American Express

In the fraud protection guarantee, Amex states that you'll be off the hook for fraudulent transactions when you take what it refers to as "reasonable care." There's no set timeline, but Amex does provide a list of what actions it looks for when evaluating your case. Reasonable protective measures include:

  1. Contacting Amex as soon as you realize your card or device on which your account information has been added has been lost or stolen
  2. Advising Amex if a renewal card has not been received
  3. Advising Amex if someone else learns of your PIN or code
  4. Contacting Amex if you suspect that your account is being misused
  5. Protecting your PIN, code and device access from others, including your family and close friends
  6. Practice safe computing (e.g. use encryption, virus scanning software, firewall, anti-spyware software and other similar safeguards)

Remember: Disputing a charge within 60 days protects you under the FCBA, but the sooner you act, the better.

Some popular American Express credit cards include: 

Check out our full list of top American Express credit cards.

Bank of America

Bank of America guarantees that all pending fraudulent charges, when reported promptly, can be reimbursed as quickly as one business day. But if you don't catch the transaction before it posts as completed, you'll have to file a claim and possibly submit documentation to prove the fraud. Do this within the FCBA's 60-day window, and you should be in the clear.

If you have the Bank of America® Travel Rewards Credit Card, the Bank of America® Cash Rewards Credit Card or others, it's good to know you can relax and know you're protected.

Chase

Chase cardholders can call the number on the back of their card and report an unauthorized charge as soon as you detect it. According to Chase's website, you won't be held responsible for unauthorized charges made with your card or account information. 

Some popular Chase cards include:

See how these Chase cards compare in our full breakdown.

Credit cards that let you freeze your account

Not to be mistaken for freezing your credit, freezing or locking your credit card is a helpful way to keep someone from using it when you've lost or misplaced it

The best-known program in this category is Discover's Freeze it® feature that lets cardholders freeze their accounts through an on/off switch within the mobile app. This stops all purchases, cash advances and balance transfers until the card is turned back on.

Similar to Discover, Bank of America has a Lock or Unlock mobile feature. To temporarily lock or unlock your account, you'd logon to your mobile app and follow the instructions below:

  1. Go to Menu
  2. Select Manage Debit Card/Credit Card
  3. Select the card you want to manage
  4. Toggle to Lock or Unlock under the card image

Credit cards with free credit score monitoring

While free credit monitoring is not going to detect immediate fraud, it will alert you if you have a sudden change in your credit score, which can sometimes mean that someone has been making unauthorized charges with your card.

CreditWise® from Capital One® offers free credit score monitoring whether you are a Capital One customer or not. This service not only keeps track of your credit score, it also scans the dark web for your personal information. With its credit simulator tool, you can see how paying off a card, adding a new line of credit or closing an old account would impact your score. You can also check to see what might happen if you had to default on payments or pay off only a portion of your debt.

Capital One also guarantees zero-fraud liability under the following conditions: If it turns out a suspicious charge wasn't something you authorized and was the result of your card being lost or stolen, Capital One has you covered. With $0 Fraud Liability, you won't be responsible for unauthorized charges. 

However, the card issuer states that $0 Fraud Liability is subject to verification and investigation.

Some of Capital One's top cards include:

Credit cards with virtual card numbers

For online shoppers, virtual card numbers are a game changer. Citi helps make your real credit card number more difficult to steal by generating a random number for you to use when you shop on the internet. 

You can create a different number for each website that you shop online. All of the decoy numbers link back to your main credit card account, but they keep your card number safe from phishers and other fraudsters. And in case someone does manage to steal it, you can simply get a new virtual number without having to replace your physical card.

Below are some of the most popular Citi cards:

View our full list of top Citi credit cards.

Contactless credit cards

Contactless cards are fast becoming the safest way to pay — for more reason than one. Not only do they slow the transmission of germs, they also contain an encryption technology that transmits your credit card information faster and more securely.

Wells Fargo shifted to contactless cards in March 2019, and going forward, all new Wells Fargo credit cards will have this technology.

Our top picks for best Wells Fargo credit cards include:

Read our full comparison of Wells Fargo Credit Cards.

Bottom line

Knowing the ins and outs of your credit card's fraud protection features is the best way to prepare for unwanted surprises. Our list is an overview of the most common terms and features, but we recommend you search your card issuer's website and read your benefits guide to see a full list of your card's safety features.

Learn more:

Information about the Bank of America® Travel Rewards Credit Card, Bank of America® Cash Rewards Credit Card, Chase Freedom®, Chase Freedom Unlimited®, Chase Slate®, Ink Business Cash℠ Credit Card, Capital One® Quicksilver® Cash Rewards Credit Card, Capital One® Savor® Cash Rewards Credit Card, Capital One® SavorOne® Cash Rewards Credit Card, Capital One® Venture® Rewards Credit Card, Capital One® VentureOne® Rewards Credit, Capital One® QuicksilverOne® Cash Rewards Credit Card, Capital One® Secured Mastercard, Citi Simplicity® Card, Citi Premier℠ Card, Citi Prestige® Card, Wells Fargo Propel American Express® Card, Wells Fargo Cash Wise Visa® Card, Wells Fargo Platinum Card, Wells Fargo Cash Back College℠ Card has been collected independently by CNBC and has not been reviewed or provided by the issuer of the card prior to publication.

Editorial Note: Opinions, analyses, reviews or recommendations expressed in this article are those of the CNBC Select editorial staff’s alone, and have not been reviewed, approved or otherwise endorsed by any third party.