What is credit card zero liability protection?
Credit card zero liability protection helps to safeguard credit card users against various credit-card related crimes. A zero liability credit card effectively means that your credit card issuer or financial institution won’t hold you responsible for money spent fraudulently or illegally in your name by others, and will reimburse you for any charges made to your card.
This is a major advantage of making online purchases with a credit card, rather than a debit card. While you can still shop online with a debit card, because it comes out of your own personal savings account, it is harder to dispute any fraudulent charges. This is where the credit card zero liability feature for fraudulent transactions comes into play; you can’t be forced to pay for something you didn’t buy.
Both Mastercard and Visa have zero liability credit card policies on all their cards, but many credit cardholders either aren’t aware of this, or don’t understand what it means in relation to their spending. So we’re here to help.
Mastercard and Visa have slightly different policies. It’s important for cardholders to know the specifics of the credit card zero liability protection policies, in order to avoid being burned financially. However, each zero liability credit card shares some common ground; namely that the cardholder needs to take as much care as possible in safeguarding their card from risk of “loss, theft, or unauthorised use”.
Mastercard and its credit card zero liability protection
Mastercard states that cardholders will be protected under their credit card zero liability policy, provided the following five conditions are met:
- You have exercised vigilant care in safeguarding your card from risk of loss, theft, or unauthorised use; and
- You immediately and without delay notify your card issuer upon discovery of the loss, theft, or unauthorised use; and
- You have not reported two or more incidents of unauthorised use in the preceding 12 months; and
- Your account is in good standing; and
- You have complied with the terms and conditions of the cardholder agreement.
The Mastercard policy also has a few other criteria and exclusions, so go here to read the policy in full.
Visa and its credit card zero liability protection
Visa’s credit card zero liability policy is a little less strict, with their only real exclusions being that their credit card zero liability protection policy “does not apply to ATM transactions, transactions not processed by Visa or certain commercial card transactions.”
For more information on Visa’s policy, read here.
So, the upshot is, as long as you take the care you normally would in regard to safeguarding your card, you’ll be protected under your card issuer’s zero credit card liability policy. Easy.
Now that you’re up to speed with zero liability policies, you might be wondering which credit card to choose. There is no one-size-fits-all card, so make sure you shop around and compare your options. Canstar’s free credit card comparison tool helps you to narrow down your options.