Unauthorized Credit Card Charges: $50 Cap and 60-Day Deadline

If someone uses your credit card without your permission, federal law caps your liability for unauthorized credit card charges at $50, and in practice most cardholders pay nothing. The $50 ceiling comes from 15 U.S.C. § 1643, and it applies no matter how much the thief actually charged.¹ Once you notify your card issuer, your liability for any charges made after that point drops to zero.

The $50 Cap, and Why You Probably Won’t Pay It

The $50 figure is a maximum, not a fee. Your issuer can hold you responsible for up to that amount only if three conditions are met: it gave you adequate notice of your potential liability and how to report loss or theft, it provided a way to identify you as the authorized user, and the card was one you had accepted. If any of those is missing, you owe nothing. And the burden of proof sits with the issuer. In any collection action, the card company must prove either that the use was authorized or that all conditions for imposing liability were satisfied.¹

On top of the statute, the major card networks impose their own zero-liability policies that go further than federal law requires. Visa, for instance, promises that cardholders “won’t be held responsible for unauthorized charges made with your account or account information,” and requires issuers to replace stolen funds within five business days of notification.²

Those network policies are corporate promises, not legal rights, and they come with conditions. Visa’s may not cover certain commercial cards or anonymous prepaid cards, and provisional refunds can be withheld if the issuer finds gross negligence or unreasonable delay in reporting. If a network denies your claim, the statutory $50 cap is still there as a backstop, and it cannot be waived by any agreement with your issuer.¹

What Counts as an Unauthorized Charge

Federal regulations define unauthorized use narrowly: someone other than the cardholder used the card without actual, implied, or apparent authority, and the cardholder received no benefit from the transaction.³

The phrase “apparent authority” is where disputes get messy. A stranger who steals your wallet is clearly unauthorized. If you handed the card to a friend for one specific purchase and they charged something else, it gets murky, because you voluntarily gave them the card. A family member who knows your card number and has used it before with your blessing may have apparent authority, even if you did not approve the particular charge. Issuers tend to push harder when the person using the card had some prior relationship with the account.

How to Report the Charges

Call your card issuer as soon as you spot the charge. That phone call stops the clock on any further liability, since anything charged after you give notice is on the issuer, not you. But a phone call alone does not preserve your rights under the federal billing error rules. For that, you need to send a written dispute.

Under 15 U.S.C. § 1666, a billing error includes charges you did not make, charges for the wrong amount, charges for goods you never received or accepted, payments the issuer failed to credit, and computational mistakes.⁴ Your written notice must include your name, account number, the dollar amount you believe is wrong, and an explanation of why.

Send it to the address your issuer designates for billing inquiries, not the payment address. These are almost always different, and mailing to the wrong one can mean the dispute never officially starts. Your most recent statement lists the correct address. Use certified mail with a return receipt so you have proof of when it arrived.⁵

The 60-Day Deadline

Your written dispute must reach the issuer within 60 days of the date it sent the first statement showing the error.⁵ That window is firm. Miss it and you lose the procedural protections of the billing error process, though the separate $50 liability cap under § 1643 for genuinely unauthorized charges still applies.

What the Issuer Must Do Once You Dispute

Federal law imposes tight deadlines on the issuer. It must acknowledge your dispute in writing within 30 days. It must then either correct the error or complete its investigation within two full billing cycles, and never later than 90 days from when it received your letter.⁴

While the investigation is open, you have three protections that matter:

You can withhold payment on the disputed charges and any finance charges tied to them. You still owe the undisputed part of your bill.⁶
The issuer cannot take legal action to collect the disputed amount or threaten to do so.⁶
The issuer cannot report the disputed amount as delinquent to credit bureaus until it finishes the investigation and gives you at least 10 days to pay.⁷

If the investigation confirms the charge was unauthorized, the issuer must credit your account and remove all related fees. If it decides the charge is valid, it must send you a written explanation and the evidence supporting that conclusion. You then get at least 10 days to pay before it can report the amount as past due.⁷

You still have a move after that. If you write back within the payment window and say the amount remains in dispute, the issuer can report you as delinquent only if it simultaneously reports the amount as disputed and gives you the name and address of every party it has reported to.⁷

Debit Cards Are Not Covered the Same Way

The credit card protections above do not apply to debit cards. Debit fraud falls under the Electronic Fund Transfer Act, and the liability rules are tiered by how quickly you report:

Report within 2 business days of learning about the loss and your liability is capped at $50 or the amount of unauthorized transfers before you gave notice, whichever is less.⁸
Report between 2 and 60 days and your liability rises to as much as $500.⁸
Wait longer than 60 days and there is no cap on transfers after that window closes. Your entire account balance is at risk.⁸

There is another difference beyond the numbers. With a credit card, the disputed money was never yours to begin with, so the issuer absorbs the float while it investigates. With a debit card, the money is pulled straight out of your bank account, and you may be waiting days or weeks to get it back while bills come due.

Business Credit Cards

Business cards generally get the same unauthorized-use protection as personal cards. Federal law specifically states that the exemption for business-purpose credit does not strip away the § 1643 liability cap. One exception: when a business issues cards from the same issuer to ten or more employees, the company and the issuer can negotiate a different liability arrangement for the organization. Even then, no such agreement can make an individual employee personally liable beyond what § 1643 allows.⁹

If Your Issuer Ignores the Rules

Card issuers that mishandle the dispute process pay for it. Under § 1666, a creditor that fails to follow the billing error procedures forfeits its right to collect the disputed amount and any related finance charges, up to $50.⁴

The bigger stick is 15 U.S.C. § 1640. A consumer who sues over violations of the credit card protections can recover actual damages plus statutory damages of $500 to $5,000 per violation on open-end credit plans, and courts can award higher amounts where they find a pattern of violations. A winning consumer also recovers court costs and reasonable attorney fees.¹⁰ The fee-shifting provision is what makes the system work. It means a lawyer can take your case even when the disputed charge is small, because the issuer pays the legal bills if you win.

1
Office of the Law Revision Counsel. 15 U.S. Code 1643 – Liability of Holder of Credit Card
2
Visa. Visa Zero Liability Policy
3
eCFR. 12 CFR 1026.12 – Special Credit Card Provisions
4
Office of the Law Revision Counsel. 15 USC 1666 – Correction of Billing Errors
5
Consumer Financial Protection Bureau. 12 CFR 1026.13 – Billing Error Resolution
6
Federal Trade Commission. Using Credit Cards and Disputing Charges
7
Office of the Law Revision Counsel. 15 USC 1666a – Regulation of Credit Reports
8
Consumer Financial Protection Bureau. 12 CFR 1005.6 – Liability of Consumer for Unauthorized Transfers
9
Office of the Law Revision Counsel. 15 U.S. Code 1645 – Business Credit Cards; Limits on Liability of Employees
10
Office of the Law Revision Counsel. 15 U.S. Code 1640 – Civil Liability