A. Below is a brief discussion of the differences on how the three different types of cards limit your liabilities:
- Have the most robust fraud protections.
- Legally, a credit card holder is responsible for no more than $50 in unauthorized purchases.
- You will have no liability at all if you report a lost or stolen card before a thief uses it.
- Under the Fair Credit Billing Act, if you have a billing problem with a merchant, a credit card issuer is responsible for investigating and resolving your complaint and you can withhold your payment until then.
- It is tied to a checking account and is subject to a different set of rules.
- You will have no liability if you report a loss or theft of your debit card before unauthorized charges take place.
- If you report the loss or theft within two business days, you are liable for up to $50.
- You could lose up to $500 if you report the problem after two business days but before 60 days have passed.
- You will have unlimited liability if you report after 60 days.
- Visa and MasterCard generally extend their zero-liability protections to signature transactions (vs. punching in your PIN) on debit cards with their logos.
- Generally have no Federal consumer protection against unauthorized transactions.
- Payroll cards that employers use to disburse wages are subject to the debit card rules.
- Many prepaid card issuers will reimburse you for fraudulent activities as long as you report it quickly.