Consumer Watch: Credit or debit?

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by Andy Treinen

WHAS11.com

Posted on April 17, 2012 at 4:46 PM

Updated Tuesday, Apr 17 at 6:33 PM

(WHAS11) -- Almost every consumer has been asked the question, credit or debit? But how many of us really stop and think before we swipe that card? In certain situations the wrong choice could put your money at risk.
 
It's a decision most of us make in a second, a cashier asks if we want to pay with credit or debit.   Budget-conscious consumers may be inclined to say debit, taking only from funds in the bank and avoiding overspending and interest. But a debit card also gives direct access to your money.

“Say if you do get hit with fraud, you know, that thief is going to make a lot of purchases, and empty out your checking account. Now, you'll get your money back eventually if you report it on time,but the problem is, while you're waiting to get your money back, you don't have money to cover your bills,” said Claes Bell from Bankrate.com.
 
Debit transactions that can be vulnerable include gas pumps, outdoor and stand-alone ATM's that can be prime for scams involving skimmers. Also vulnerable are transactions that take your card out of sight, like at a restaurant. And for purchases on the internet, where malware or spyware could put financial information at risk, credit may be best.
 
Claes Bell says the protections are built in.

“There's stronger protections on credit cards for consumers. Your maximum liability under federal law is 50 dollars regardless of how much fraud someone conducts on your credit card,” said Bell.

Regardless of which option you choose be on the lookout for fraud by checking your account activity on a regular basis.

Click here for information about The Legal Aid Society's a free Ask-A-Lawyer clinic on Tuesday, April 17.

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