Which Is Safer Your Credit Card or Debit Card?
Just a few days ago it was revealed that Target had debit and credit card data stolen from its databases for tens of millions of customers. It brings up the question, which one is safer to swipe, your debit card, or your credit card?
People love their debit cards. They interface directly with their checking accounts. There are no bills, and no chance of spending more money than you have available, making it far more difficult to overspend or do an impulse splurge purchase. But when it comes to fraud, debit cards are "loaded with holes," according to Johm Ulzheimer, a credit expert at the CreditSesame.com, a credit management site.
Debit and credit cards are treated differently by consumer protection laws. Under federal law, your personal liability for fraudulent charges on a credit card cannot exceed $50, but if your debit card is compromised, you could be liable for $500 or more depending on how quickly you catch it.
Another issue with debit cards is how quickly the money is available to you if you do experience fraud. If someone charges an extra $500 on your credit card, then it just sits there until it is refunded, not affecting your finances significantly. But if the same $500 gets charged to your debit card, and thereby your checking, you are out that money while the bank does an investigation, which can take anywhere from 12 to 24 hours. If you have bills or rent due, this can be a major inconvenience.
We've covered how to prevent fraud in earlier posts, so there are two pieces of advice to give in this situation. It isn't the first time massive amounts of consumer data have been hacked, and it will not be the last.
The best thing you can do is monitor your accounts diligently. "Waiting until the end of the month to check out [your] credit card statement for fraudulent use is a relic of the past," Ulzheimer says. "Fraud is a real-time crime, and we as consumers have to be constantly engaged."
The other thing to do: if there is any question about your account being compromised, call the bank or creditor and let them know you would like a new account number. It may be a hassle to switch out the payment options on certain company websites you frequent, but it's far less hassle than what you'll deal with if you become a victim of fraud.
If you say, I don't use credit cards, or, I can't get a credit card, then the answer is simple: you need to, and if you can't get one consider using one of our trade lines at Boost Credit 101 to get approved for the best possible option.
Remember, frequently check your statements. The sooner you catch fraud the easier it is to deal with, and when in doubt, close the current account number and have a new one issued; it will not affect your history or credit, better to be safe than sorry.
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