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Debit vs. Credit: Which is Safer to Swipe

Not all plastic is the same when it comes to safeguarding consumers. Both debit and credit cards offer solid protection to account holders. But credit cards provide an extra layer of defense because they’re not directly tied to your checking or savings account. In the event of theft or fraud, you’ve also got a better chance at getting your money back if you paid with a credit card than if you paid with cash. An added bonus: you can bank valuable rewards points for yourself.

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Fraudulent charges on a credit card can be reversed in 24 hours or less, but it can take up to two weeks to have funds restored to a debit card account. In the meantime, bills or other expenses could pile up.

And of course, this isn’t to say you should misuse credit. Be conscious of spending and pay off your balance each month (or at least try to). You can also set up reminders to check your credit card spending regularly, to help you stick to your budget.

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If you don’t trust yourself with a credit card, the most dangerous places to swipe your debit card are outdoor or freestanding ATMs and gas pumps. These terminals are more susceptible to being outfitted with skimming devices, which are affixed to card slots and collect personal information when the card is used.

The recent data breaches at Target and Neiman Marcus have shown – again – that your information isn’t always secure with merchants. This is especially true when doing business online. Even if you trust the site, your payment details could be compromised, which makes the web a very risky place to use your debit card. And think twice about forking over your debit card at a restaurant. When your card is out of sight, employees have the opportunity to steal your info.

If your credit card information is lost or stolen, all major financial institutions and card issuers promise  zero liability for fraudulent transactions.

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But only 17 out of 25 major banks, like Chase and Bank of America, extend that protection to debit card PIN purchases or ATM withdrawals. According to a report from Javelin Strategy and Research, institutions including Citizens Bank and PNC don’t cover these types of transactions.

Under the Electronic Fund Transfer Act, consumers aren’t responsible for more than $50 if a lost debit card or fraudulent charge is reported within two days. If the loss is reported 60 days after a statement containing fraudulent charges is mailed, a consumer’s liability jumps to $500. If an unauthorized debit transaction is reported more than 60 days after the statement is mailed to the consumer, the damage can be unlimited.

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These days, many financial institutions will catch bogus charges before you do. Still, check your statements regularly. No, really, check your statements. Notify your bank of anything suspicious. Sign up for and don’t ignore text alerts from your bank that let you know whenever unusual transactions are made.

If you do spot something fishy, contact your bank immediately. The FTC recommends following up with a certified letter detailing the fraudulent charge so there’s a record of when you notified them.