This misconception has been rampant for years, and has led people to continue to cling to using their credit card when they could have let them go.

What is that misconception?  Well it goes something like this: I use my credit card for online transactions because it’s more secure and has better protections than a debit card.

I was recently shredding and disposing of some old documents, and came across this, printed on the back of every bank statement we get.  I’d honestly never noticed it before:

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It’s really excellently, clearly worded.  It’s not in super fine print, and it’s not buried in the middle of a ten-page cardholder agreement.

Paraphrase:  If you lose your debit card and tell us within two business days, you MAY lose up to $50.  If you don’t tell us within two business days, you can lose up to $500.  That’s if someone gets your card and your PIN and fraudulently pulls cash out of an ATM.

Now the more common, likely scenario (the second part).  The cardholder has ZERO liability for any fraudulent purchase transactions, including internet-based transactions. 

If someone steals your credit card number and types it into a webpage or swipes it at a store, you have zero liability for that.  It’s the same as if someone stole your checkbook and wrote checks in your name!  You wouldn’t have to pay that money!  Just like if someone stole your credit card, you wouldn’t be expected to pay the bill that they ran up!

The difference between a debit and credit card in a situation like this is as follows: When someone purchases something with your stolen credit card, they’re stealing from your credit; when someone purchases something with your stolen debit card, they’re stealing from your bank account.

Just because they’re stealing from your bank account doesn’t mean you’ll lose all that money; it simply might represent a slightly larger inconvenience then having credit stolen.  The bank takes the hit for the money either way, it just will take some time to fill out the appropriate documentation and for them to credit your account, but you ultimately will get your money back. 

If you’re going to use it for points or perks, I might not agree, but that’s one thing that most debit cards really don’t have.  Zero liability is something that debit and credit cards share alike, not an advantage of clinging to your credit card habit.

I bet if you look at your bank statement you may find the exact same thing on it, or at least something similar!

Question: Have you ever had your debit/credit card lost or stolen?  How was it resolved?