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How Protected Is Your Money When Using A Debit Or Credit Card?

debit and credit card protection

When you use a debit or credit card, your money is protected in a few ways. But how well it is protected dependson the type of card and the protections offered by your bank or credit card company. There is a difference between debit card protection and credit card protection. Here’s a look at how protected your money is when you use these cards.

The Difference Between The Two Card Types

When it comes to debit cards, they are directly linked to your bank account. So, when you buy something with your debit card, the money is immediately transferred from your account to the merchant.

On the other hand, credit cards are not linked directly to your checking or savings account. When you use a credit card, you are borrowing money from the credit card issuer up to a certain limit. You will then need to repay that debt, plus interest and fees, if any, later.

How Well Is Your Money Protected?

The level of protection you have against fraud also varies depending on your card type.

Debit card protection

Thanks to the Federal Reserve’s Regulation E, debit cards offer pretty good protection against fraud. This regulation protects consumers from being held responsible for more than $50 in fraudulent charges made with their debit card, as long as they report the fraud within two business days of learning about it.

However, if you wait longer than two business days to report the fraud, you could be liable for up to $500 in fraudulent charges. And if you don’t report the fraud within 60 days of receiving your statement, you could be held responsible for all the fraudulent charges.

Credit card protection

Credit cards offer even better protection against fraud than debit cards. That’s because, under the Fair Credit Billing Act, you’re only liable for up to $50 in fraudulent charges on your credit card. And you have 60 days to report the fraud to your credit card issuer.

Fraud Protection From Your Bank Or Credit Card Issuer

In addition to the protections offered by the federal government, your bank or credit card issuer may also offer additional fraud protection. For example, many banks will reimburse you for any fraudulent charges made on your debit card, even if you don’t report them within the two-business-day window.

Some credit card issuers offer different liability policies, which sometimes means you won’t owe anything if your card has been used fraudulently.

It’s important that you remain vigilant when using your cards. There are plenty of online shopping scams that people fall prey to. You’ll need to check with them directly to find out what kind of fraud protection your bank or credit card issuer offers.

The Bottom Line

When you use a debit or credit card, your money is generally well protected against fraud. But the level of protection you have depends on the type of card you use, and the fraud protection policies offered by your bank or credit card issuer.

To ensure you’re as protected as possible, it’s a good idea to check with your bank or credit card issuer to find out what kind of fraud protection they offer. And if you think you’ve been a victim of fraud, be sure to report it to your bank or credit card issuer immediately.

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