A great question to think about: are you protecting your money? Most purchases today are made using plastic cards instead of cash. It’s easy to pull out your debit card and swipe it to make a purchase or even enter your card information online, but you should remember that there are ways to help better protect your bank account and money depending on the payment method you choose.
Credit Card Vs. Debit Card
If you have a checking account, you likely have a debit card to use with that account. That card is linked directly to your account which contains your money. Your debit card allows you to make purchases using your deposited money, and those purchases are deducted from your account. If you make a purchase on a credit card, you are using borrowed money that you will have to pay back. If you pay back less than the full amount of the credit card purchase, you will also be charged interest.
Using Debit Cards
You may be wondering why a debit card contains a credit card logo (like Visa or MasterCard). Or what it means when you are asked to choose credit or debit at the register. Either way, the money will be still be deducted from your checking account. One major difference lies in how you are protected from fraud.
If you are a victim of card fraud, and you chose “credit” at the register, typically the credit company (i.e. Visa or MasterCard) will take the responsibility for disputing fraudulent charges. Visa, for example, has a Zero Liability Policy. They guarantee that a card holder will not be held responsible for charges that they did not authorize. They will protect you if your Visa credit or debit card is lost, stolen or fraudulently used, online or offline. This policy does not apply to certain commercial card and anonymous prepaid card transactions, or transactions not processed by Visa. MasterCard has a similar policy.
If you chose “debit”, Visa/Mastercard do not participate in fraud resolution. If you see unauthorized charges on your account, it is a lengthier process to resolve and you must report the fraud not more than two days after the charge. You and your financial institution can work together on getting your lost money recovered, but it can take time and the issue may not be resolved most favorably.
In either scenario, by using your debit card you have also shared your card information which could be used fraudulently in the wrong hands.
Why Use a Credit Card?
A great way to protect your money is to use a credit card for your purchases. Using a credit card ensures your bank account information is not linked to any purchases that you make. If you use your card, and someone steals your information, you are then able to work with the card company to dispute and close your card. Your bank account information is still safe because your debit card is not involved.
Shopping with a credit card may seem like it adds an extra step because you have to pay the credit card bill monthly, but as long as you are sure to shop smart and pay off your balance each month, you can shop with less worry about card fraud.
SRU Federal Credit Union offers a low interest Visa Credit Card! If you have any questions or would like to apply for one, please give us a call or stop into the office. Members can apply through online banking.