As the use of bank debit cards grows in relation to the use of credit cards, more cases of debit card fraud are popping up. Debit cards have been touted as a smart way to control your finances, but do they bring a higher risks of losing money via fraud?

A number of recent news reports have offered surprising facts and useful advice for users of debit cards: MSNBC reporter Gayle B. Ronan, in a piece titled
“Debit or credit: Weighing the financial risks,” discusses the fact that where credit cards won’t charge you more than $50 for fraudulent use of your credit card if reported within 60 days, that same window for debit card fraud is usually only 48 hours. (The article also mentions that debit cards can overdraw a bank account in the same way that people bounce checks, as debit card transactions do not necessarily happen in real time.)

The Charlotte News & Observer‘s Frank Norton, in the article “Debit cards offer less security than credit cards,” reports that debit cards offer fewer protections for consumers who want to dispute a charge — and, unlike credit cards, in which you’re disputing a charge you haven’t paid for yet, the money for debit card purchases is already gone from your account.

USA Today writer Kathy Chu offers this headline in the March 12th edition:
“Security breaks could curtail debit card use,” referring to a number of incidences in which debit card information was hacked from merchant databases. (Of course, credit card information has often been stolen this way as well.)

And in the March 20th issue of Newsweek, financial writer Linda Stern asks
“How Good is Debit?” Stern notes not only the security aspects of debit cards, but also extra fees some banks may tack on for debit card transactions, and the weaker rewards programs offered to debit users versus credit card customers.

Published 03/14/06 (Modified 05/07/12)