What to Do if You Lose Your Wallet

06/03/2015 07:33 pm ET | Updated Jun 03, 2016

By Jocelyn Baird,

Many people count their wallet among their most prized possessions, and it's no wonder -- we store everything from our photo IDs and credit cards to loyalty cards and money in there. Nothing is quite as awful as realizing you've lost your wallet, especially if you're not sure what to do when that happens. Having a plan of action is the key to ensuring as little damage is done to your credit and identity.

I lost my wallet! What should I do?

You just reached into your back pocket or purse to pay for lunch and it's nowhere to be found. The first instinct most people have is to panic -- that's understandable, but it doesn't really help much. Calm yourself as much as possible and conduct a thorough search retracing your steps since the last time you can remember having it. If you don't find it (or hear from someone who picked it up) within the first 30 minutes, it's time to spring into action to prevent disaster. Although it's nice to hope your wallet will be found and returned, it's best not to wait around to find out whether you're going to be blessed by the good luck fairy or taken advantage of by a thief. Here's what you should do next:

1. File a police report. Establishing a record of your missing wallet, no matter whether it was lost or stolen, is imperative. The police report will include details of where or how it went missing, and you may be asked to produce a copy of it when replacing some of the items from your wallet -- such as your driver's license. The police report can also come in handy in case you need to dispute criminal charges or anything else perpetrated in your name as a result of your loss.

2. Call your credit card companies and banks to report your cards missing. One of the first things a thief will do with a stolen wallet is to try and either use your credit/debit cards -- or sell their information. The sooner you can report the card as missing, the sooner your card issuer can cancel it and issue a new one. Since many people use their credit or debit cards over cash, you will probably want a new card sooner rather than later to ensure your daily life gets back on track as quickly as possible.

3. Contact the DMV to report a stolen driver's license. It might not seem like a big deal, but a thief can do a lot of damage with your government-issued photo ID. From unpaid car rentals to something far more serious like theft, if your license is used by someone during these acts then it is you who will be held responsible. Don't wait for bills (or the police) to start arriving at your door. Report your missing license to the DMV so there will be a record of it if any misuse occurs. This will make it much easier to contest unpaid bills or legal charges wrongly filed against you.

4. Notify your insurance company about a lost benefits card. Medical identity theft is a big deal, and a criminal with your insurance benefits card can potentially use it in conjunction with your driver's license to take advantage of your insurance benefits. This is an easy one to forget for many people, but it's definitely not one you want to go without reporting. Some insurance companies will allow you to print a temporary ID card while you wait for a replacement to arrive by mail, which means you won't be without your benefits in case of a medical emergency.

5. Place a fraud alert on your credit files. Contact one of the three of the major credit bureaus -- Equifax, Experian and TransUnion -- to place a fraud alert on your credit files with them. You only need to contact a single bureau because they are legally required to set it with the other two once the alert has been requested. That said, you may want to follow up with all three of the bureaus a couple of days later to make sure the alerts have been placed. Each fraud alert lasts for 90 days and helps prevent identity theft because it requires the bureaus to contact you to confirm any new accounts opened in your name. It's also wise to request a copy of your credit reports to determine whether or not any suspicious activity has been happening in your name.

6. Cancel any other important cards or documents that were in there. If you kept rewards cards for your favorite retailers and restaurants, you'll want to make sure any points you've racked up don't get spent by someone else. In some cases, it might be easier to just get a new rewards card, but for something like a hotel rewards account where you've accumulated serious points worth a high monetary value, you will definitely want to report the loss and get a replacement card.

If you didn't lose your wallet yet...

Hopefully you won't, but it's best never to say never. Like most anything, there are some precautions you can take so if you do lose your wallet someday, it won't be as big a disaster as you might imagine.

1. Never leave your social security card in your wallet. Your social security card is one of the most valuable personal documents you own, and it should always be stored somewhere safe and secure. Many people carry their card with them in their wallets, but that's a dangerous idea considering how easy it is to misplace your wallet or have it stolen. An ideal place to store your card is in a personal safe or a locking filing cabinet in your home.

2. Avoid carrying large sums of cash. Although it might be a pain to cancel your credit or debit cards and deal with getting charges reversed and funds returned, any money spent by criminals with your cards can be returned. The same is, sadly, not true for cash. If you carry a lot of cash on your person, you can kiss it goodbye if your wallet winds up lost or stolen. Keeping some cash on hand is a smart idea, but try to limit it to only what you might conceivably need in an emergency where cards won't cut it.

3. Sign up for an identity theft protection service. As you can see, there's a lot of work involved when you lose your wallet. Contacting company after company to report cards missing and request new ones takes time and effort, and it can be extremely stressful. Furthermore, remembering exactly what was in your wallet can be difficult for those of us who like to collect rewards cards. Fortunately, there's a way to have peace of mind when it comes to your wallet with the help of an identity theft protection service. Most plans have some form of lost wallet protection, which includes assistance with card cancellation and replacement as well as the ability to store the information for all the cards in your wallet online so you don't have to try and remember it off the top of your head.

In addition, these services can help with placing fraud alerts and also provide updated credit reports and scores so you can keep an eye on what's happening with your credit file. This is important even if your wallet is safe and secure -- identity theft is, sadly, a threat that lurks around many corners in our lives. Learn more about identity theft protection services to determine which one is right for you by reading our in-depth reviews of each service. Find out more tips for protecting your identity on a day-to-day basis by following our identity theft protection blog.

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