Summary
You’re probably used to being asked “Credit or Debit?” when you go to pay with a card. However, there is a difference. Paying with a credit card comes with greater fraud protections than using a debit card. Here’s an explanation of why you should always choose to pay with credit.
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When you swipe your card, you might be asked the question, “Credit or debit?” Many people use debit cards since they’re connected to a bank account. However, when it comes to safety, it turns out that one of these offers better protection. Here are four reasons why I recommend paying with a credit card.
For Personal Tech Media, this is Two Minute Tech. I’m Jim Herman.
First, with a credit card, the law gives you 60 days to report fraud, and you’re only liable for $50 of fraudulent purchases. With a debit card, you only have two days to report fraudulent transactions with a $50 liability. After the two days, your liability increases to $500. Credit cards have much better fraud protection.
Second, a debit card purchase deducts money directly from your bank account. While that might be good for authorized transactions, it’s a problem when fraud happens. You don’t have to pay for a fraudulent purchase on your credit card, but your bank may not refund the money to your bank account while it investigates a fraudulent debit card purchase.
Third, if you have a problem with your purchase, such as poor quality work, you can also file a dispute with your credit card. As with the fraudulent transactions, you don’t have to pay for that transaction until the bank has resolved the dispute.
And finally, some credit cards also offer other benefits, like rental car insurance, travel insurance, or extended warranties. These benefits can give you peace of mind or added protection. However, due to the limits on the fees to run debit card transactions, these benefits rarely exist for debit cards.