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Zero fraud liability, a policy many credit and debit cards advertise to consumers as a safety measure against theft or fraud, seems like a stand-up thing for card companies to do. Federal Law requires consumers not be liable for more than $50 in charges that result from lost or stolen card information. This means that many credit card holders are not responsible for unauthorized purchases—at least for more than $50.
Zero liability remains a standard inclusion for many consumer cards in the U.S. However, corporate or large business card servicers are not legally required to offer zero liability for their cardholders. Even if they do, business card holders should also practice caution when giving card access to employees or adding them as authorized users. Any charges racked up by a disgruntled employee do not usually count as fraud (because the employee is the one using the card) and will not be protected. Always double-check the details of a card’s liability protection by calling the number on the back of a credit or debit card or by checking the issuer’s website.
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Blue Cash Preferred® Card from American Express
On American Express's Website
4.1
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On American Express's Website
Up to 6% Reward Rate
Earn 6% cash back at U.S. supermarkets, on up to $6,000 per year in purchases (then 1%); Earn 6% cashRead More
Welcome Bonus
Earn $250
Annual Fee
$0 intro annual fee for the first year, then $95
Regular APR
19.24%-29.99% Variable
Editorial Review
Big spenders at US supermarkets and road warriors who frequently spend at US gas stations or transit like taxis, rideshares or transit can rack up impressive cash back rewards.
Pros & Cons
- High cash-back rewards in several categories of spending
- No enrollment is required, cash back is automatic
- Comes with several travel benefits and protections
- Charges an annual fee
- 6% cash back at U.S. supermarkets is capped at $6,000 in annual spending (then 1%)
Card Details
- Earn a $250 statement credit after you spend $3,000 in purchases on your new Card within the first 6 months.
- $0 intro annual fee for the first year, then $95.
- Buy Now, Pay Later: Enjoy $0 intro plan fees when you use Plan It® to split up large purchases into monthly installments. Pay $0 intro plan fees on plans created during the first 12 months from the date of account opening. Plans created after that will have a monthly plan fee up to 1.33% of each eligible purchase amount moved into a plan based on the plan duration, the APR that would otherwise apply to the purchase, and other factors.
- Low Intro APR: 0% on purchases and balance transfers for 12 months from the date of account opening. After that, your APR will be a variable APR of 19.24% – 29.99%. Variable APRs will not exceed 29.99%.
- 6% Cash Back at U.S. supermarkets on up to $6,000 per year in purchases (then 1%).
- 6% Cash Back on select U.S. streaming subscriptions.
- 3% Cash Back at U.S. gas stations.
- 3% Cash Back on transit (including taxis/rideshare, parking, tolls, trains, buses and more).
- 1% Cash Back on other purchases.
- Cash Back is received in the form of Reward Dollars that can be redeemed as a statement credit or at Amazon.com checkout.
- Get up to $120 in statement credits annually when you pay for an auto-renewing subscription to Equinox+ at equinoxplus.com with your Blue Cash Preferred® Card. That’s $10 in statement credits each month. Enrollment required.
- Thinking about getting the Disney Bundle which can include Disney+, Hulu, and ESPN+? Your decision made easy with $7/month back in the form of a statement credit after you spend $9.99 or more each month on an eligible subscription (subject to auto renewal) with your Blue Cash Preferred® Card. Enrollment required.
- Terms Apply.
Earn a $250 statement credit after you spend $3,000 in purchases on your new Card within the first 6 months.
Credit Score ranges are based on FICO® credit scoring. This is just one scoring method and a credit card issuer may use another method when considering your application. These are provided as guidelines only and approval is not guaranteed.
How Does $0 Fraud Liability Work?
In most cases, any fraudulent purchase made on a covered credit card is protected by zero liability no matter the size and no matter how the purchase was made—in-person, via phone, mobile device, ATM or online. It’s up to the credit card holder to report fraudulent charges to their credit card issuer as soon as the charges are discovered. Then the servicer will remove or cancel any unauthorized purchases after conducting an investigation and restore funds. Typically, the cardholder will not be liable for any fraudulent charge. However, if a credit card does not offer $0 liability, cardholders may be liable for up to $50 in charges.
The four major credit card networks in the U.S. cover cardholders with a zero liability policy. Each major network is outlined below. Remember to double-check this information with a particular card issuer, as terms and conditions change regularly.
Visa
Visa credit cards are covered by $0 fraud liability protection. Some commercial and prepaid cards are not protected.
Discover
All credit cards are protected.
American Express
American Express credit cards offer $0 fraud liability.
Mastercard
Consumer credit cards offer $0 fraud liability protection. Commercial cards and unregistered prepaid cards are not protected.
What Are Credit Card Liabilities?
Credit card liabilities refer to the financial obligations that individuals or businesses have incurred through the use of credit cards. When a person makes purchases or incurs expenses using a credit card, they essentially create a liability to repay the borrowed funds. This liability includes the outstanding balance on the credit card, which typically accrues interest if not paid in full by the due date.
Are Debit Cards Covered by Zero Liability Protection?
Some debit cards offer similar zero liability protection but it greatly depends on which type of card and details surrounding the discovery. The Electronic Funds Transfer Act limits a cardholder’s liability to $50 if the debit card holder notifies the bank within two days of discovering fraud or after losing their card. If the cardholder waits longer than two days, then they may be liable for up to $500. If the cardholder waits more than 60 days, they may be liable for the entire amount. Always read the fine print and call the bank to ensure any card’s protection.
Who Isn’t Covered By Zero Liability?
Credit and debit card companies offer zero liability for every eligible cardholder. But if the cardholder is not in good standing, they may not receive the same level of protection. If you are delinquent on payments, wait too long to file a claim or irresponsibly share card information (e.g. sharing pins with multiple people), you may be liable.
Other Credit Card Liabilities
Credit card liabilities encompass not only the principal amount borrowed but also any additional fees, interest charges and penalties associated with the normal use of the credit card. It’s crucial for cardholders to manage their credit card liabilities responsibly to avoid accumulating excessive debt and to maintain a positive credit history. Understanding and staying aware of one’s credit card liabilities are essential aspects of financial literacy and responsible card management.
How Can Someone Catch Fraud?
Regularly review account statements and account activity online to catch fraudulent charges. Enabling mobile alerts offers a convenient solution, with real-time updates on purchases made or suspicious activity. Many credit or debit card issuers also offer complimentary fraud monitoring services via text, phone or email alerts. For example, if the cardholder resides in Los Angeles, California, and suddenly there are three purchases made in Madrid, Spain, the card issuer may contact the cardholder immediately to verify suspicious charges. Contact a card issuer to see if they offer this service.
How Can Someone Protect Themselves Against Fraud?
While there is no way to guarantee your account will never be the victim of fraud, there are some steps you can take to help prevent fraud.
Sometimes opting to use a credit card to make purchases instead of a debit card is the best form of protection. Skimming machines installed by thieves can rip card information when the cardholder innocently buys something. If a credit card is skimmed, it’s much easier to handle fraudulent charges because money has not been stolen directly from a bank account. Instead, the cardholder simply loses access to that credit line until the issuer resolves the incident and sends over a new card.
Another way to help against fraud is to check your account activity regularly either online or on a mobile app.
You can also regularly check your credit report to make sure no new accounts have been opened under your information. There are plenty of ways to check your credit score for free.
Lastly, remember to call the bank or card issuer to confirm that they offer zero liability protection.
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