After doing some grocery shopping you see that you have been overcharged for a few hundred dollars. Having come back from an international trip you notice that you credit card statement says you have made a $7,000 purchase somewhere in Asia. Sounds familiar? Or quite possible?
According to the Internet Crime Complaint Center credit/debit card fraud is in top seven among categories of complaints referred to law enforcement. Thousands of cardholders become victims of identity theft and other types of credit card fraud every month.
Plastic seems to become less and less safe. However, no one seriously considers coming back to cash. So card users try to find the safest ways in the world of plastic.
Now, the question is: which card type is more secure to use - credit or debit? At the first glance, the technology seems to be similar. Credit and debit cardholders seem to be equally vulnerable to fraud. However, when it comes to disputing unauthorized charges the type of plastic you have used starts to matter.
Electronic Funds Transfer Act regulates debit transactions. It requires the fraud victim to quickly discover the problem and report it to the bank.
If you are alert enough to track the problem in two business days you are lucky to be liable for not more than $50. If it has taken you up to two months you might have to say good-bye to as much as $500. After 2 months your liability is unlimited.
Many banks claim that they offer zero liability if unauthorized transactions have been made to your debit account. However, it is up to the bank to decide whether your case qualifies for reimbursement. For example, the bank might state that you have not exercised reasonable care in protecting your card. So, very often you will be to blame for the situation and you will be held liable for the transactions.
Credit card users are in much more favorable conditions. Under the Fair Credit Reporting Act you can not be hold responsible for any of the unauthorized charges. All you need to do is inform your bank about the situation and check your credit report to make sure it has not affected your credit score. Some people think that disputing charges might hurt your credit history but this is just one of the credit card myths.
Credit cardholders also get confused with fraudulent promotions of so-called 'credit card loss protection offers'. Taking advantage of consumers guiltlessness these companies sell 'credit card loss protection' claiming that according to new laws credit card owners are liable for unauthorized charges just like debit card users.
The conclusion is simple. Although credit and debit cards function in a similar way and can not guarantee 100% security credit card holders can easily challenge unauthorized transactions while debit card users are very likely to stay liable.
So, if you are still using your debit card for purchases may be it is time to fill out a credit card application and protect your money.
Read more on credit card protection to keep your finance safe. About credit card marketplace
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