Action Line: Are debit cards safer than credit cards?

A reader: I’m still working on my holiday shopping. My sister tells me I should not use my debit card because it is too risky these days. I don’t like using my credit cards, but I don’t want to use my debit card if it is too risky. Is it safer to use credit cards?

Action Line: Credit cards can actually be a better choice for you. If your credit card is lost or stolen, you merely need to report it IMMEDIATELY. Swift action limits any liability you may have. The Fair Credit Billing Act (FCBA) and the Electronic Fund Transfer Act (EFTA) do offer protection if your credit, ATM or debit cards are lost or stolen. Under federal law, your personal liability for fraudulent charges on a credit card cannot exceed $50.

That is not the case for debit cards. If your debit card is used fraudulently, you could be liable for $500 or more, depending on how quickly you report. Here are the debit card rules:

▪ If you report within two business days after you learn about the loss or theft, your maximum loss is $50.

▪ If you report the loss more than two business days after you learn about it but less than 60 calendar days after your statement is sent to you, losses are capped at $500.

▪ If you report it more than 60 calendar days after your statement is sent to you, you’re on the hook for all the money taken from your ATM/debit card account, and possibly more; for example, money in accounts linked to your debit account.

If your card has been lost, stolen or hacked, call and report it immediately. Then follow up with email or mail. Be sure to include your account number, the date and time you noticed the card was missing and when you initially called to report the loss.

Check your statements carefully to make sure that the charges on your statement are in fact yours. If the charges are not yours, again report it immediately. There is normally an address and/or phone number on your statement on where to report your issue.

Here are some tips to help you make your shopping trips safer:

▪ Keep a record of your accounts, expiration dates and phone numbers of your card issuers in a safe place so that if your identity is compromised, you can report it quickly and easily.

▪ Carry only the cards you will be using. Leave the rest at home under lock and key.

▪ Do not write down your PIN in your purse, wallet or on the card. Memorize it.

▪ If you are using an ATM or debit card, check your transactions carefully and often. The funds for these purchases are usually taken from your account very quickly. In some cases, it is instantaneous.

▪ If you bank online, it is really easy to check your accounts often.

And if you are still not sure, you can always use cash. Happy Holidays!

This story was originally published December 14, 2015 at 8:06 AM with the headline "Action Line: Are debit cards safer than credit cards?."