Why Your Debit Card May Not Be Safe For Any Purchase

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Why Your Debit Card May Not Be Safe For Any Purchase

Postby CreditCardGuru » Wed Apr 02, 2008 8:17 pm

Today debit cards are a popular choice for purchases. However when it comes to the bigger ticket transactions, it’s recommended to use your credit card instead.

This is because all credit cards purchases in the United States are protected by a law known as the Fair Credit Billing Act. Under this law you can only be held accountable for a maximum of $50 for credit card fraud, which includes damaged merchandise or goods that were never delivered. However nearly all creditors don’t bother with the $50 and instead give you zero liability for fraud.

With debit cards, don’t let the words “Mastercard” or “Visa” on them fool you. The protection you have the same benefits as you do with a credit card transaction. Although Visa and Mastercard claim zero liability for fraudulent transactions with their debit cards also, keep in mind this is a policy and not a law. Therefore it can be enforced (or not) at their discretion. Also when you enter a PIN number instead of signing for a debit transaction, it may be processed over non-Mastercard or non-Visa networks. These offer them a potential “off the hook” pass for their zero liability policy. Be sure to sign for the purchase instead of using a PIN number as this ensures it’s a transaction that goes through the Visa or Mastercard network.

Both debit card issuers have exceptions when it comes to negligence. For example if you threw your debit card in the trash intact and a crook got a hold of it… if Visa could prove this, you most likely will not be protected. At the end of the day it’s usually the financial institutions that issue your debit cards who decide who incurs the fraud liability.

Under federal law the benefit you have with debit card transactions is the right to dispute a charge. However if you wait more than 2 days to report the error, your $50 liability increases to $500. So unless you are keeping tabs on your banking account transactions on a daily basis, this could prove to be a problem. If for some reason you don’t notice and report the fraud within 60 days, you lose all protection and will be held entirely liable for any and all fraudulent transactions. If your debit card is a Visa or Mastercard, these time limits don’t apply since their policies claim they will cover it. But still it’s important to remember those are just their policies, not laws.

The benefit of credit card fraud protection is you are protected by federal laws as well as more stringent policies by the issuers. You can simply call up your credit card company and they will reverse the charge while the transaction is under investigation — meaning you won’t have to wait until after to get your money back. The fraud reporting process is usually easier too, especially with premium credit cards such as American Express.

It’s even risky using debit cards for small purchases. Not because those amounts will make a dent in your finances, but each purchase is an opportunity for a scam artist to swindle your account numbers… to make much bigger purchases. This is why I recommend using your credit cards in place of debit. Just pay your balance off in full every month and you will pay no interest, earn rewards, and have greater protection against fraud.


vitamin-c
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TOTALLY AGREE!!!!

Postby vitamin-c » Sun Apr 20, 2008 5:06 pm

Totally agree :cool: I hate though how when you swipe your debit card at stores they automatically try to process it as a debit transaction. The whole reason they try that is because debit transactions are cheaper than credit card transactions for them, CHEAPSKATES! But yeah when that happens with my Bank of America card I always just hit 'cancel' and that processes it as a credit card transaction instead. Much safer!

magyar1045
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Postby magyar1045 » Fri May 30, 2008 5:22 pm

The only way I ever use the PIN/debit function key is when I want cash back over and above the amount of the purchase.
The credit key/function will not let you do that

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Take care

Postby markphilip » Thu Aug 21, 2008 4:40 am

Whenever you purchase anything through credit cards someone hack your passward. It is save but before purchasing anything dont show your passward to anyone.

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Postby magyar1045 » Thu Aug 21, 2008 9:46 am

Another thing to avoid with debit cards is using them at gas pumps, as the system puts a hold of $75 to $100 against your card until the actual purchase goes through. If your actual charge is $30, and takes a while to go through $45 to $70 is frozen, and if a check clears that is more it will bounce on you.

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Postby Mogul of Pineapples » Fri Aug 22, 2008 10:29 pm

I've heard that it's the same with restaurants. There's a hold placed on your debit card for more than the actual amount in order to cover the tip. So let's say your tab was $20, the debit card will place a hold for $40. This is robbery and they shouldn't be allowed to do this for gas, food, or anything else.

I only use my debit card as an ATM card at the bank. With how sneaky they are with account balances it's too risky to use a debit card for purchases.
Disclosure: I am a moderator/paid staff of this site, which does have advertising relationships with some credit cards that are discussed and linked to. Regardless, anything I say is my honest opinion.

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Postby cashnocredit » Mon Feb 23, 2009 11:30 pm

I had a debit card scanned at a restaurant 5 years ago. A small test charge was made then the crooks ran up $6000 buying gold and jewelry in Australia. Though a bit of luck I discovered this just a few hours after the charges were made and called in canceling the card. They didn't have the pin, just the magnetic strip info. Apparently it was scanned off my card at the restaurant and emailed to Australia. They fabricated a card and matching ID to buy the gold. Clearly a major criminal enterprise.

Oddly, the bank showed little interest in notifying the store of the fraud even though it was likely they still had video (and memory) of the transactions.

They did reimburse the charges and send a new card quickly.

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Postby DGenerateKane » Tue Feb 24, 2009 4:07 pm

A Year after I got my debit card my bank was still calling verifying transactions, but they only verifyed over $100 dollars. So while I got a call about a couple purchases that same day a $94 charge went through unbeknownst to me. Caught it a couple days later when I checked it online and was refunded immedietly no questions asked and a new card was sent. Nowadays though I use my credit cards 98% of the time just to build credit and have more money in the bank when they calculate interest. :p

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Postby Mogul of Pineapples » Wed Feb 25, 2009 4:18 am

It seems that banks aren't too interested in pursuing criminals even when they can be identified. I think a lot of that has to do with the police being understaffed and/or too lazy to pursue these criminals. The banks know the cops won't do what's necessary on their end, so they figure it's a lost cause and give up. I don't blame them the police have never investigated any crimes I've been victims of in my life, including credit card fraud. I had the shipping address that was in LA the crooks used and LAPD still would not investigate. It's discouraging having law enforcement so apathetic like that.
Disclosure: I am a moderator/paid staff of this site, which does have advertising relationships with some credit cards that are discussed and linked to. Regardless, anything I say is my honest opinion.

Current Cards:
American Express: Blue Cash, Simply Cash Bank of America: WorldPoints Platinum Plus Chase: Amazon, British Airways, Cash Plus Rewards, Freedom, Ink Cash Citi: Thank You Premier, Dividend Platinum Select Discover: More
Primary Everyday Card: American Express Blue Cash
Primary Travel Card: Chase Sapphire Preferred

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Postby darryl » Thu Apr 16, 2009 6:34 am

Many debit cardholders confuse debit cards with standard ATM cards. Like most Americans, you may not be aware of what your debit card can do for you and what you must do to protect yourself if your wallet is lost or stolen.What's more, less than half of all Americans can name every item in their wallet without looking, and only 12% keep a written list of their wallet's contents.



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