Those protections are the main reason it’s recommend to use credit cards instead.
But it doesn’t make sense to me, why would I borrow money (credit) if I had it (debit)?
My guess is that banks deliberately do this so people can accidentally spend more money than they have and companies start charging interest.
In: Economics
If you get defrauded with a debit card, you lost your money. If you get defrauded with a credit card, you lost the bank’s money.
The bank cares about their money, not yours. And the bank has the means to get it back.
Credit card: “I’m buying this now. The credit card company promises that I’m good for it. They’ll pay you in a little bit, then I’ll pay them back later.”
Debit card: “Here’s my money. Take it. Now you have that money and I don’t have it anymore.”
Credit card companies offer more protection because they’re an intermediary, and it’s in their own best interest to prevent fraud since they’re directly involved.
Debit cards are effectively the same as giving them cash. You have just as little protection as if you gave them cash.
In the United States, the protections are spelled out in laws that were passed at different times about different subjects. The protections afforded to debit cards were not designed for debit cards, though. There isn’t a big incentive in Congress to change the laws to harmonize them.
Note that banks can offer more protections than the law requires, and many do. What you’ve heard about debit-vs-credit cards is based on the law, and it doesn’t apply to every bank/issuer. Some banks are very generous with their debit card protections.
My bank gave me my money back with a fraudulent debit purchase. But I was out the few hundred till it got straightened away
I’ll never use it online again. Especially not Amazon
mine has the same protections, any debit card with the Visa or Mastercard logo has protection.That was actually tested a few years ago when it was stolen and thieves bought $500 at a grocery store with it. I was not out a cent.
Some great answers in here, but one point i didn’t see is that debit and credit cards aren’t the same products
A debit card is essentially your access card to your bank account. It lets you get at your bank account when you need to, and the bank makes money off its service charges.
The credit card is a service that the credit card companies are trying to sell to people. They make money based on the card’s usage so it’s in their best interest (no pun intended) to make it the most attractive service to bring in more customers AND make the customers use the credit card instead of their own money. That’s one of the reasons why you’ll see many more add ons and rewards and points and insurance and purchase protections than the bank will offer on just an regular account with a debit card
Well let’s clarify something here, debit card run as a credit card has the same protections as a credit card. So if you press credit on the terminal you have those benefits. When you enter your PIN number, you are not running through the credit card network and two things are happening here, you lose the fraud coverage of that network and you are taking an extra step to ensure you are the legitimate cardholder with the card.
Now why is running through the credit card network important? Well in the case of Visa and Mastercard the dispute systems for chargebacks are built into their networks. Merchants have to agree to the dispute/arbitration processes mandated by those networks. So in a lot of cases the merchant may be on the hook for that fraud before the bank takes the hit.
Running through the debit networks, there are not the really any processes to dispute transactions unless it’s an error. In addition if fraud or a dispute comes up, the PIN being used is kind of a smoking gun that the cardholder was present. Obviously, skimmers can be used to duplicate mag stripes and capture PINs but usually that fraud is captured locally and then happens in a different region from the cardholder. It’s more obvious in these cases and the bank has regulations that require resolution in favor of the cardholder. However, in every case the bank is taking the loss on PIN based transactions and they will mitigate that loss as much as possible within their legal rights.
This info assumes US regulations and Visa and MasterCard debit cards. These rules will vary on regions and I personally have no direct experience with other brands like Amex and Discover.
Who do you bank with? Most banks offer fraud and theft protection for debit cards. It’s the main reason a transaction gets rejected if you’re traveling or in an area you never frequent. One time I got off the freeway to get gas and my card rejected. When I called, they told me it was flagged as potential fraud because I didn’t live in that area and unlocked the card so I could use it.
I don’t even carry a debit card. I turned mine into the bank and I have a card that only works at ATMs. I use credit cards for most purchases and pay them off every month. Yes, you have “protection” with a debit card but you can bounce checks/ACH debits before you discover the fraud. Most people don’t discover it until they are bouncing checks.
Because its YOUR money and not the banks. Banks dont care about your money, just theirs.
Its LITTERALLY that arbitrary.
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