The claim
Under Regulation Z (12 CFR § 1026.12(b)), a cardholder's liability for unauthorized use of a credit card shall not exceed the lesser of $50 or the amount of money, property, labor, or services obtained by the unauthorized use before notification to the card issuer. A cardholder is liable for unauthorized use only if the conditions in paragraph (b)(2) are met, and if state law or the card agreement imposes lesser liability, the lesser liability governs.
The receipt
(i) Definition of unauthorized use. For purposes of this section, the term “unauthorized use” means the use of a credit card by a person, other than the cardholder, who does not have actual, implied, or apparent authority for such use, and from which the cardholder receives no benefit.
(ii) Limitation on amount. The liability of a cardholder for unauthorized use of a credit card shall not exceed the lesser of $50 or the amount of money, property, labor, or services obtained by the unauthorized use before notification to the card issuer under paragraph (b)(3) of this section.
(2) Conditions of liability. A cardholder shall be liable for unauthorized use of a credit card only if:
(i) The credit card is an accepted credit card;
(ii) The card issuer has provided adequate notice of the cardholder's maximum potential liability and of means by which the card issuer may be notified of loss or theft of the card. The notice shall state that the cardholder's liability shall not exceed $50 (or any lesser amount) and that the cardholder may give oral or written notification, and shall describe a means of notification (for example, a telephone number, an address, or both); and
(iii) The card issuer has provided a means to identify the cardholder on the account or the authorized user of the card.
(3) Notification to card issuer. Notification to a card issuer is given when steps have been taken as may be reasonably required in the ordinary course of business to provide the card issuer with the pertinent information about the loss, theft, or possible unauthorized use of a credit card, regardless of whether any particular officer, employee, or agent of the card issuer does, in fact, receive the information. Notification may be given, at the option of the person giving it, in person, by telephone, or in writing.
(4) Effect of other applicable law or agreement. If state law or an agreement between a cardholder and the card issuer imposes lesser liability than that provided in this paragraph, the lesser liability shall govern.
If there is unauthorized use of your card before you report it missing, the most you will owe for unauthorized charges on the card is $50. Many cardholder agreements say you are not responsible for any charges in this circumstance.
What the rule doesn't say
The $50 figure is a ceiling, not an amount owed. The rule says liability “shall not exceed” the lesser of $50 or the amount obtained before notification, and paragraph (b)(4) says a lesser liability under state law or the card agreement governs. The rule covers “unauthorized use” as it defines the term: use by a person, other than the cardholder, who does not have actual, implied, or apparent authority for the use, and from which the cardholder receives no benefit. The cardholder is liable only if every condition in paragraph (b)(2) is met, including that the issuer gave adequate notice of the maximum potential liability and of how it may be notified. This page quotes only the liability limit in Regulation Z; paragraph (g) points to Regulation E (12 CFR 1005.12(a)) for “issuance and liability for unauthorized use” in instances involving both credit and electronic fund transfer aspects.
What you can do
One prong of the limit is the amount obtained before notification, so when and how the issuer was notified matters under the rule. The rule says notification may be given, at the option of the person giving it, in person, by telephone, or in writing. The CFPB's Ask CFPB page, linked below, says to check the credit card agreement to review rights regarding unauthorized charges, and that the agreement can be found or requested on the issuer's website or in the CFPB's Credit Card Agreement Database.
Sources: 12 CFR § 1026.12 (Regulation Z), eCFR · CFPB, Regulation Z § 1026.12 · CFPB, Ask CFPB: Am I responsible for unauthorized charges if my credit cards are lost or stolen?
Sources last checked: October 8, 2026.
Everything here is consumer information — not financial or legal advice. It covers what a rule says and where to find it; the decisions stay yours.