Credit or Debit?

Traditional advice would suggest to avoid using Credit Cards because of the potential to overspend. BUT there is DANGER in using Debit Cards. The next time you are asked "Debit or credit?" at the checkout, use your credit card. The law limits your liability to $50 if a credit card is stolen, but you could lose much more if you report debit card theft.

Fair Credit Billing Act
This federal act limits the liability of a credit card holder to a maximum of $50 for any unauthorized transaction -- whether or not your card was actually stolen. Someone may have been able to access your account without the card.

Electronic Fund Transfer Act
This limits the liability of a debit card holder to a maximum of $50 if you notify the bank about a lost card within two days and up to $500 if the bank's notified after two days. After 60 days, there is potentially unlimited liability on the debit cardholder.

If someone makes an unauthorized transaction without obtaining the debit card, you could be liable for all transactions made after 60 days of receiving your bank statement and before you tell the bank.

Proactive measures to limit liability for unauthorized transactions:

• watch your checking account balance
• check your statements
• call the bank immediately to report a lost or stolen debit card, or notify the bank of an unauthorized transaction

Shoppers must be made aware of ways to safeguard personal information and their money.

Not annually.

Not monthly.

But weekly, if not daily.

Besides switching from debit to credit cards, I suggest the regular check of accounts and your credit report. Using the credit card option on your debit card, is not safe, either. It is a non-PIN option to using money in your account.

Companies are sloppy with information. People need to be aware that companies are not protecting their information.

Your credit card is their money, but your debit card is your hard earned money!!!

Consumers should find out their bank's written policy on liability for unauthorized transactions if they use a debit card. Although a number of banks limit liability to $50 or less for fraud, a thief can drain your account, and if a conflict with the bank arises, no law requires that you see any of that money again.