A more thorough explanation:

Credit card fraud is a type of identity theft where someone steals another person's credit card information to make unauthorized purchases or withdraw funds from the account. Federal law limits the cardholder's liability to $50 in case of credit card theft, but most banks waive this amount if the cardholder signs an affidavit explaining the theft.

There are two main types of credit card fraud: application fraud and account takeover. Application fraud happens when someone opens a credit card account in another person's name using their personal information. The fraudster then uses the new credit card to take out large amounts of cash, leaving the victim to pay the debt. Account takeover occurs when a criminal hijacks an existing credit card account by obtaining enough personal information to change the account's billing address. They then report the card lost or stolen to get a new card and make fraudulent purchases with it.

Another common method used to achieve an account takeover is called "skimming." Skimming schemes occur when employees of businesses illicitly access customers' credit card information. They then either sell the information to identity thieves or hijack the victim's identities themselves.

Technological advances have also created avenues for credit card fraud. With the rise of online purchasing, perpetrators no longer need a physical card to make an unauthorized purchase. Additionally, electronic databases containing credit card data may be hacked or crash on their own, releasing customers' credit card information. These electronic database hacks put the security of many accounts at risk at once.

For example, if someone steals your credit card information and uses it to make purchases without your permission, that is credit card fraud. Another example is if a criminal obtains enough personal information about you to open a credit card account in your name and then uses it to make purchases, leaving you with the debt.