So I'm reasonably sure that if you dont cancel the card after losing possession, you can be held liable for transactions that occur with the card at that point.

So I'm reasonably sure that if you dont cancel the card after losing possession, you can be held liable for transactions that occur with the card at that point. Especially if your PIN is also compromised. You're not liable for transactions that occur fraudulently when you still retain possession of the card. So yeah, it's an important distinction.