Is credit safer than debit?

You might want to rethink using your debit card while making transactions online. Your debit or credit card information will be treated quite differently if your account is compromised and purchases are made without your consent. Credit cards enable you to spend money you don’t have, but debit cards limit you to spending just what’s in your account, according to Brian Walsh of SoFi, a certified financial planner and senior manager of financial planning at the company. An explanation of what it implies is provided below.

It is connected to your bank account and PIN, and when you use it to make a transaction, it deducts money from your balance. Debit cards can be used to withdraw cash from an ATM or earn cashback from some merchants, as well. A credit card, like a debit card, is a plastic card that may be swiped to make transactions. Revolving credit lines are connected to credit cards, so you may use them as required. However, you will be charged interest if you carry debt over to the next billing period. If you don’t meet the minimum payment, you’ll be hit with an extra charge.

Do Debit Cards Possess Greater Security Than Credit Cards?
The way in which fraudulent purchases are handled differs greatly between debit and credit cards, aside from the ability to make purchases. If a thief gets your debit card or credit card details, they have access to all of your money in your checking account. It is instantly wiped from your account if you use it fraudulently, and you are bereft of money until the issue is resolved.

According to Dan Wilke, publisher of personal finance site Credit Liftoff, “if you have extra accounts connected to your debit account, such as savings account for overdraft protection, these accounts would also be exposed.”
It’s up to you to detect and report any illegal charges as fast as possible if you want the case to end in your favour. When it comes to fraud reporting, “there are stringent timeframes in place, and if customers do not notice it early, they may be responsible for fraudulent charges,” Wilke explains.

In order to keep your financial responsibility to a maximum of $50 in the event of a lost or stolen card or PIN, you must tell your bank within two business days of learning of the loss. However, you might be held accountable for up to $500 in fraudulent charges if you don’t tell your bank within two business days. Additionally, these policies cover electronic financial transfers such as online bill payments and automated payments that are made using your debit card.
Fraudulent usage of your debit card may be undetected for some time, unless you inspect your account statements, for example. You have sixty days from the date of the charge to notify your banking institution if you suspect fraud. During the 60-day reporting window, you are still accountable for up to $500, but you are not liable for any extra charges as long as you do so. After 60 days, your bank may hold you liable for any transactions that occurred between the time you first reported the problem and when you finally notified them, if it can be shown that informing your bank sooner would have prevented those fees from being applied.

The Fair Credit Billing Act, whereas, provides comprehensive safeguards for credit card users that are not available to debit card users, according to Wilke. As an example, the maximum liability for fraudulent charges on a credit card is $50. It is common for card companies to absolve their customers of any responsibility in the event of an illegal payment or transaction. You aren’t responsible if your physical credit card is taken, but the account number is used to make fraudulent transactions.

If your credit card is illegally used, you won’t lose any money since the purchases are made against a line of credit as compared to straight from your bank account. The investigation of credit card fraud “may take time to complete like debit cards, but you will not be losing any money throughout the inquiry,” Wilke tells the New York Times.

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