Media

Questioning Debit Card Safety

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)