Which is Riskier Debit Cards or Credit Cards?
A lot has been reported about the debate between debit cards and credit cards in terms of which puts you at a higher risk for identity theft. This is especially important debate these days, as debit cards become more and more prominent.
In 2009, debit cards were used for over 50 percent of noncash financial transactions, up from 1 percent just 15 years prior. The most popular of the debit cards, the Visa debit card, is in the pockets of over 350 million Americans today. To decide which card is riskier for yourself, take a look at the following facts.
Credit Cards
*You pay using money belonging to the creditor and receive a monthly bill.
*You can dispute charges with a vendor before having to pay for them out of your own pocket.
*You usually have 100% fraud protection if you report the fraud within 60 days of when it occurred.
*The maximum liability you can be held responsible for, if you report fraud in a timely manner, is $50.
*You are usually credited back the amount under investigation until the investigation is resolved.
Debit Cards
*You pay using money already in your savings account.
*You use a personal identification as added security when paying in person.
*The cash you use to pay can be immediately deducted from your account.
*There is no way to stop a payment once it has been processed.
*You can dispute charges, but you can be held responsible for up to $500 in fraudulent purchases unless you report the fraud within two business days.
*Disputes must be investigated within 10 business days.
*If you don’t report the dispute within 60 days, you could lose all of the money in the linked bank account.
The biggest risk with using debit cards comes if you have your savings and checking accounts linked together so that your savings can cover any overdrafts. If a thief starts using your card and doesn’t get caught right away, it’s possible that he can drain the money out of both of these accounts.
It’s recommended that you set up an account just to use for debit purchases and that you keep it completely separate from other financial accounts. We absolutely love this tip, read it again and then make sure you take action on it. Also, keep the balance relatively low, putting only the money you need for your monthly purchases in it.
Whether you use a credit card or a debit card, watch out for shoulder surfers and skimmers. Shoulder surfers peer over your shoulder trying to get a glimpse of your card number. They may also try to watch you type in your personal identification number or security code. Skimmers are electronic devices that record your card number. They are sometimes present on ATMs. Try to stick to familiar ATMs so that you will be able to quickly recognize if they have been tampered with.
For more information on this subject please see http://www.idtheftcenter.org/artman2/publish/c_guide/Fact_Sheet_131.shtml . To protect yourself from identity theft visit our comparison chart or read our professional reviews of the best identity protection companies.