Comments on: Debit Card Liability Protection

By: Elizabeth Williams

Elizabeth Williams — Mon, 05 Jan 2009 19:49:35 +0000

I think it is important to note that this is Visa’s policy, not federal law, and policy can be changed/revoked at any time. Credit card protections are based upon federal law. I’d be interested in more information on what the laws are regarding liability on signature-based debit card transactions.

By: Dariaclone

Dariaclone — Fri, 02 Jan 2009 15:33:06 +0000

But I seem to remember that certain places, Wal*Mart included, won’t let you sign and process as a credit transaction because the merchant fees are greater on the credit transaction than the debit one.

By: Russell Cavanagh

Russell Cavanagh — Wed, 31 Dec 2008 13:19:22 +0000

Here in the UK, credit card purchases between £100 and £30,000 are protected by law – even if the credit card is used to make only a fraction of the payment (such as for a deposit on an item). Debit cards have no such protection. Thanks for a great post.

By: Nick

Nick — Wed, 31 Dec 2008 01:39:26 +0000

In my experiences, my credit card company is much better dealing with fraud than the bank associated with my debit card. For my credit card, I just need to call, say what I’m disputing, and usually the next day the charge will be off, and an investigation will begin. For the debit, you call, they send you a form, send it back, then it takes two more weeks to get your money back, even if you are in the right.

By: kitty

kitty — Mon, 29 Dec 2008 16:36:04 +0000

“the zero liability coverage extends to debit cards WITH credit based transactions”
There is one major difference however. When you use your debit card, the money is immediately taken from your checking account. When you use a credit card, the money aren’t taken from your checking account but posted to your credit card.

Let’s say you have a checking account with automatic payment set up for a number of bills – heating, phone, mortgage. Let’s assume somebody stole your card’s info – number, expiration date, etc. – without your being aware of it and used it to charge $5000. Let’s assume this happened in the beginning of the month. With a debit card this amount is taken immediately from your checking. Sure, as soon as you notice the problem, inform your bank, you may get your money back within 24 to 48 hours (if your debit card provides protection). But by that time your automatic payments may have bounced resulting in a score of charges. Sure your bank may refund any overdraft fees, but what about everyone who couldn’t cash your checks or who had automatic payment bounce in the meantime?

With a credit card, even the one set up for automatic payment of the full balance, you have time. Even with automatic payment, you get a statement that lists all the charges 2 weeks to a month before the money is taken from your checking. Your calling a card and dispute the charge causes this charge removed from your bill pending investigation. In the meantime your money are still on your checking and all your bills are fine.

So yes, credit cards are safer then debit cards. Personally, I don’t carry my debit card around. I do have an ATM card that doesn’t double as credit card that is tied to an account with very little money. I take it with me if I go abroad as this account is with credit union that doesn’t charge for currency conversion and use it at foreign ATMs for cash expenses. For other expenses I use credit cards.