The Holiday season is a fantastic time to stretch your budget to cover a few purchases that you are sure will bring a warm smile on Christmas Morning.
Which card should you use when playing Santa Claus? Your credit card or your debit card?
It’s easy to assume that your debit card would be your first choice, in order to save on interest fees, however, this holiday season, it might be safer and less costly to actually use your credit card for those holiday purchases.
Credit Vs Debit Difference
In usage, a debit card is actual money that is directly debited from a checking account, even if you select “credit” when you use your debit card at checkout. This is compared to a credit card, which is a small loan you make with your credit card issuer, that you have promised to pay back.
The big difference between these two pieces of plastic is the rights and responsibilities that come alone with the credit card transaction.
If you dispute a charge on your debit card, your bank will have to investigate the charge, which could take at least ten days, leaving your account short of actual money. For a credit card, your dispute will also be investigated, but the charge will be put on hold, and you won’t be out any actual money until the investigation is final.
Your maximum liability for fraudulent credit card transactions is typically $50, though in some cases can be $0 if your card offers that as a benefit. For debit transactions, there is a lot more at stake.
First off, debit card users have to report potential fraudulent transactions within 48 hours in order to have a maximum liability of $50. If reported between 3 and 60 days, the maximum liability will be set at $500. For any time frame after 60 days, the debit card user might be liable for the entire amount of the fraudulent transaction. That can really put some bah humbug into your holiday shopping.
Unfortunately, most debit card users don’t monitor their transaction history that closely, so you can see how painful that experience can be.
So, be safe this holiday shopping season, especially if your are purchasing products online. With the many security breaches occurring at retailers, using your credit card might be the safer choice if you have one available due to the generous credit card fraud protections.