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Will that be debit or credit?

By Kemberley Washington ·
Thursday, December 26, 2013
Posted: 9 am ET

The recent Target Corp. payment data breach impacted more than 40 million customers and raised an interesting question: Which is safer, debit cards or credit cards?

Credit card users have more protection: They are only liable up to $50 for fraudulent activity, according to the Federal Deposit Insurance Corp. (FDIC). That is true regardless of how long it takes you to discover the transaction.

By contrast, with debit cards, time is of essence. Users should check their bank transactions as soon as possible, since debit cards users are only liable for $50 if potentially fraudulent activity is reported within two calendar days after you discover the transaction, according to the FDIC. However, after two days, users could be liable for at least $500, and possibly more.

When swiping a debit card, keep in mind that you are putting your entire bank account at risk. Therefore, if you fall victim to a payment breach, it puts much of your hard-earned savings at risk, such as the cash you earn from your paycheck.

Here are a few tips to protect your debit card:

  • Set up alerts through your financial institution so you are notified each time your account is used.
  • Consider using a credit card for shopping, as it offers better protection.
  • If you prefer to use a debit card, open a separate account linked to the card. Then, keep that account funded at relatively low levels. That way, you will not suffer major financial damage if your card is used fraudulently.

Remember to remain vigilant. The key to protecting yourself is keeping an eye on your finances.

Kemberley Washington is a certified public accountant and professor at Dillard University at New Orleans. She writes a personal fiance blog at Follow her on Twitter or connect with her on Facebook. 


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January 06, 2014 at 12:26 am

Come on lets get the story right. Lets just twist the truth until is sounds the way you want?? What ever happened to true journalism. When using a debit card as a credit card, (that is to say when you sign and do not use your pin) a debit card is offered the same protections as a credit card. Please read Visa or Master Cards terms of use. It is true that if you use your pin your risk is many times greater. So sign for your purchases and never use your pin, except maybe at the bank. I don't have credit cards and would not get one for any reason. I have used debit cards as a credit card for years and have not had any issues. Use your head, be sure to shred any documents which have personal information on them before throwing them away. Think before you act is the watchword of the day.

Mary D
January 05, 2014 at 4:00 pm

I have used debit cards for years. I check my account at least once a day. Twice I have had fraudulent charges on my account. My bank is Bank of America. They have refunded the charges just a few days after filing a fraudulent charge with them. Yes, I have to get a new card. The second fraudulent charge I found before Bank of America did because I am diligent about checking my account. I like debit because I am going to limit myself on how much I spend. Not so much with credit, unless you pay it off each month. I don't like to carry a lot of cash. I am not sure what bank the person above has but my debit cards for gas purchases does not capture twice the amount. It automatically charges the debit card the exact amount. If I use it as a charge card it charges $1.00 till the exact amount comes through the account. I also use the debit card from Bank of America to check into hotels and charge for incidentals is never taken out of my account balance but just pending so it does not tie up my money.

January 05, 2014 at 3:56 pm

Oh, gee. Look, another ad saying "running up debt is better than paying with what you have."
CASH, as wildbill6996 said!!!