Credit or Debit? Which Protects Your Identity?
October 15th, 2011 | Author: weissheiss
Using your debit card is often easier than your credit card when paying in line at the local grocery store or shopping center. Plus, everyone knows that credit cards are evil, right?
It turns out that if you’re disciplined enough to use credit cards (meaning, pay them off in full right away), then you can use them to protect yourself from potential identity theft. They offer distinct advantages you might not be aware of.
The use of credit cards creates a two-layer protection system for you, while debit cards may have none or possible only a single layer. In the event that your card number is stolen, most banks will reimburse you after the thief cleans out your bank account. However, the key thing to remember is that your bank account will get cleaned out, which means at least a day or two with no money. The money will literally be taken from you, and you may bounce checks unexpectedly. Plus, if the bank decides for any reason not to reimburse you, the money is gone for good. I once had a card number stolen and the bank only reimbursed for bounced check fees, but that was before identity theft was so widely known. Also, bear in mind that if you use an overdraft account, the crook can wipe that out as well.
The opposite is true with a credit card, since by the nature you are borrowing money when you use the card (that’s the danger of a credit card, right?). If the thief racks up a big shopping spree on your account, you are only liable for up to $50 of the total, and since the thief was using your credit, not your actual bank account, you aren’t suddenly wiped out.
You must dispute the bill in these cases, but as long as you are on the level with the credit card companies, you might as well set their massive corporate credit card company attack dogs on the loose to get those crooks. The credit card companies often have former detectives and FBI agents working for them, so get them involved. While you can do a little digging on your own, it is nothing like brining the full force of the fraud investigation department for Citibank or MasterCard. These guys deal with crooks like mobsters and counterfeiting rings, so they will go after whoever stole your card. Because, after all, if the thief gets your debit card, he steals your money, but if he gets your credit card, he steals MasterCard or Visa’s money.
Neither situation, having either your credit or debit card stolen, is a desirable one. This protection is also not a reason to run up your credit card debt. But, if you manage your money and your credit wisely, you should be aware of this protection you can use. Making purchases online with a debit card should be avoided, and use caution when shopping online even when using a credit card.
I want to be clear; the best way to avoid either credit card theft or debit card theft is by paying with cold, hard cash. It’s a good policy anyway. But if the time comes to pay electronically, consider your options and protect yourself.
Posted in Debit Card Protection | 
Tags: Banks, Debit Cards, Detectives, Distinct Advantages, Overdraft Account, Shopping Center, Shopping Spree, Thief