Fraud Risk - Debit vs Credit Cards - TravelPUNK Backpacker College Student Budget Travel Message Boards!



Go Back   TravelPUNK Backpacker College Student Budget Travel Message Boards! > Members Lounge > General Travel Tips, Education, Advice > Travel Budget, Money Matters, Financial Talk

Travel Budget, Money Matters, Financial Talk Mom, can I borrow ten grand?! Gimme yo mastercard! How the heck can I pay for my trip?! Ideas for making money. How much dough do I need?

Raileurope.com: See Europe by train
Reply
 
LinkBack Thread Tools Display Modes
Old 03-15-2007, 05:57 AM   #1
TPunk Emeritus
 
LiveFreeorDie's Avatar
 
Join Date: Mar 2004
Location: Newly relocated to C-bus - USA
Posts: 2,900
Thanks: 0
Thanked 0 Times in 0 Posts
Default Fraud Risk - Debit vs Credit Cards

I thought I would share some info regarding the U.S. laws as they pertain to fraudulent use of your debit card versus a credit card. There are some big differences in risk and it is important to be aware of them:

Credit cards are regulated by federal fair-credit laws, which generally limit consumer responsibility for losses to $50 for unauthorized use. Many card issuers waive even that. Moreover, fraudulent charges are the bank's and the retailer's headache, not yours.

But debit cards are regulated by the law that governs electronic fund transfers. While losses are limited to $50 for unauthorized use reported within two business days, any losses reported after two days are limited to $500. If you report a loss more than 60 days after the bank transmits a statement that includes an unauthorized funds transfer, the bank doesn't have to reimburse you. As a result, cardholders can be liable for losses up to the entire balance in the account and their maximum overdraft line of credit.

A growing number of banks are touting "zero liability" protections to promote debit-card use, but there can be exceptions. Card issuers Visa USA and MasterCard Inc. offer their "zero liability" guarantees only to consumers who use their cards with a signature instead of a PIN. That can be difficult at times because retailers often steer consumers to enter their PINs on keypads. The reason: Banks get higher fees from merchants when consumers use debit cards with signatures, rather than PINs. Some banks may choose to offer zero-liability protection to PIN users, too. J.P. Morgan Chase & Co.'s Chase bank, for instance, offers this protection to PIN-debit users if a fraud is reported within 60 days of receiving a bank statement.
__________________
\\Jamie\\



"Those who would give up essential liberty to purchase a little temporary safety, deserve neither liberty nor safety." Ben Franklin

"The plural of anecdote is not data"
LiveFreeorDie is offline   Reply With Quote
Old 03-15-2007, 10:38 AM   #2
french touch
 
Esterina's Avatar
 
Join Date: Aug 2003
Location: Québec
Posts: 3,251
Thanks: 0
Thanked 0 Times in 0 Posts
Default

Good to know, thanks for sharing the infos !
__________________

people are people


Esterina is offline   Reply With Quote
Old 03-15-2007, 02:13 PM   #3
Admin
 
travelpunk's Avatar
 
Join Date: Jan 2003
Location: spiznain
Posts: 6,561
Thanks: 41
Thanked 13 Times in 11 Posts
Default

So, as a traveler, what would you bring in your money belt/wallet and what we be your ratio of using credit cards vs. debit cards.

For me, I would carry a debit card with the majority of the funds in the saving account versus the checking account, as well as 2 to 3 credit cards.

I would use my credit cards 100% of the time, if possible and pay it down with my cash when the trip is finished, getting airlines miles in the process and if there was ever a problem with fraud, it would be with the banks money and not mine.

Anyone else?
travelpunk is offline   Reply With Quote
Old 03-15-2007, 02:31 PM   #4
TPunk Emeritus
 
LiveFreeorDie's Avatar
 
Join Date: Mar 2004
Location: Newly relocated to C-bus - USA
Posts: 2,900
Thanks: 0
Thanked 0 Times in 0 Posts
Default

I would recommend only using your debit card to withdraw money from ATM's that appear to be with legitimate banks (versus shady, unbranded stand-alone ATMs) and not use it for any other purpose unless in an emergency.

I would eliminate or at least minimize use of the debit card to make purchases - particularly on-line, but also at restaurants, pubs, stores, etc. Either use cash (that you brought or took out from a bank's ATM) or use an actual credit card.

If you do have to use a debit card for a purchase, try to use the credit card option on the POS terminal so that it requires a signature. If you only use a PIN, you are potentially at higher risk.

Bottom line is that protection for fraud when using your debit card is not nearly as good as a credit card. Protect yourself!
__________________
\\Jamie\\



"Those who would give up essential liberty to purchase a little temporary safety, deserve neither liberty nor safety." Ben Franklin

"The plural of anecdote is not data"
LiveFreeorDie is offline   Reply With Quote
Old 03-15-2007, 02:46 PM   #5
Admin
 
travelpunk's Avatar
 
Join Date: Jan 2003
Location: spiznain
Posts: 6,561
Thanks: 41
Thanked 13 Times in 11 Posts
Default

Quote:
Originally Posted by LiveFreeorDie View Post
I would recommend only using your debit card to withdraw money from ATM's that appear to be with legitimate banks (versus shady, unbranded stand-alone ATMs) and not use it for any other purpose unless in an emergency.

I would eliminate or at least minimize use of the debit card to make purchases - particularly on-line, but also at restaurants, pubs, stores, etc. Either use cash (that you brought or took out from a bank's ATM) or use an actual credit card.

If you do have to use a debit card for a purchase, try to use the credit card option on the POS terminal so that it requires a signature. If you only use a PIN, you are potentially at higher risk.

Bottom line is that protection for fraud when using your debit card is not nearly as good as a credit card. Protect yourself!
Excellent. That's how I feel with the protection. I will use the debit with ATM's abroad, but even then sometimes, I will take cash advances from a credit card sometimes.
My friend from Germany came over a year ago and was scared to use his credit card in Los Angeles. I asked "Why?" He said that is Europe, when you go to a restaurant and pay with a credit or debit card, some crooked thieves will swipe it in 2 machines as their ringin up your bill in the back or underneath the counter where the machines are. One machine for the business, and the other is their own private one that coworkers don't see that logs down your number, then the make a duplicate card with your information.
Better this happening on a credit card, than a debit card.

I have heard nightmares from people who got sucked dry of all of their cash, because of fraudulent debit card use. This guy gave up on debit cards after 2 rounds of fraud.

This is why I do most of my purchases with credit cards here, there, and everywhere .
travelpunk is offline   Reply With Quote
Old 03-15-2007, 02:47 PM   #6
Admin
 
travelpunk's Avatar
 
Join Date: Jan 2003
Location: spiznain
Posts: 6,561
Thanks: 41
Thanked 13 Times in 11 Posts
Default

And thanks for bringing this to our attention, Jamie !
travelpunk is offline   Reply With Quote
Old 03-15-2007, 04:23 PM   #7
always trippin'
 
freespiritz's Avatar
 
Join Date: Apr 2006
Location: The Island of Rhode
Posts: 2,071
Thanks: 0
Thanked 1 Time in 1 Post
Default

Thanks for the heads up, Jamie! This really makes me feel like I should get myself a credit card.

Right now I only have debits, but I do have most of my money in the savings as opposed to checking, as Tony said...and transfer funds over as I need them. I actually have yet to use my card while traveling - I've had cash only (and never had to withdraw) for all my trips so far!
__________________


Check out my band!
freespiritz is offline   Reply With Quote
Old 03-15-2007, 11:01 PM   #8
Yoda
 
space virgin's Avatar
 
Join Date: Jan 2004
Location: Hell
Posts: 5,533
Thanks: 0
Thanked 0 Times in 0 Posts
Default

In addition to cash I mostly use my bank cards when traveling but that's almost exclusively for ATM withdrawls only. Since I bank with a credit union, my fees are FAR less than what a normal bank charges. I have not yet financed any trips on credit.
__________________
Various bloggings (Version 2.0)
space virgin is offline   Reply With Quote
Old 03-16-2007, 09:56 PM   #9
TPunk Recognized
 
lost in texas's Avatar
 
Join Date: Jun 2004
Location: Texas
Posts: 464
Thanks: 0
Thanked 0 Times in 0 Posts
Default

This is good info, LiveFree. A friend who worked at my bank told me the same thing before I started traveling. Make purchases on the credit cards, because of the fraud protection and general ability to protest charges and remedy errors more easily. Even if it's not fraud, and someone screws up, once the charge is made to your debit card the money is actually pulled from your account, and it takes much longer to get it back.

Also, I was reminded to use the ATMs less frequently when possible. Getting out several hundred at a time instead of spending cash for each day adds up and saves on fees.
__________________
"Men are not prisoners of fate, but only prisoners of their own minds."
-- FDR
lost in texas is offline   Reply With Quote
Reply






Thread Tools
Display Modes

Posting Rules
You may not post new threads
You may not post replies
You may not post attachments
You may not edit your posts

BB code is On
Smilies are On
[IMG] code is On
HTML code is Off
Trackbacks are On
Pingbacks are On
Refbacks are On



All times are GMT -7. The time now is 06:01 PM.



 

Search Engine Optimization by vBSEO 3.2.0

1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32 33 34 35 36 37 38 39 40 41 42 43 44 45 46 47 48 49 50 51 52 53 54 55 56 57 58 59 60 61 62 63 64 65 66 67 68 69 70 71 72 73 74 75 76 77 78 79 80 81 82 83 84 85 86 87 88 89 90 91 92 93 94 95 96 97 98 99 100 101 102 103 104 105 106 107 108 109 110 111 112 113 114 115 116 117 118 119 120 121