Theft Your liability with a credit card is capped at $50; Visa and MasterCard assume all liability for unauthorized purchases. You don't have the same legal protections with a debit card.
But if your debit card is stolen or someone has used your number, most banks will credit your account, at least provisionally, within a day or two. If you are a responsible customer (who doesn't repeatedly report stolen cards), the bank is likely to assume all liability.
Using the signature side of a Visa or MasterCard debit card instead of punching in the PIN gives you the same protections as you would with a credit card.
Disputes Credit cards offer stronger legal protections than debit cards in case of disputes about the quality of the goods or services and billing errors. Once you notify the credit card issuer, you do not have to pay the disputed charge while the issuer investigates.
But if you've used your debit card, your account must be reimbursed. MasterCard and Visa have similar policies for credit and debit cards, though you may have to sign for your purchase in order to be covered. If you enter your PIN, the bank that issued the debit card ultimately decides whether your complaint is valid.
Credit scoreUsing a debit card rather than a credit card to pay bills and make purchases does not affect your credit score. Credit card payments are reported to the credit bureaus, but debit card use is not. Your payment history makes up 35 percent of your FICO score (the most widely used credit score), and that score determines the interest rate you will be offered when you apply for a mortgage, auto loan and other credit.
Rewards Credit card rewards programs are usually more generous than those of debit cards. You might have to spend as much as $4 to earn a point with your debit card rather than the standard $1 per point you receive when you use a credit card. You must sign for your debit card purchase and not punch in your PIN to receive points.
So using a debit card for smaller purchases, as long as you don't incur overdraft fees, makes sense. But when you're purchasing a big-ticket item, consider using a credit card or sign for your debit card purchase to preserve protections.
But if your debit card is stolen or someone has used your number, most banks will credit your account, at least provisionally, within a day or two. If you are a responsible customer (who doesn't repeatedly report stolen cards), the bank is likely to assume all liability.
Using the signature side of a Visa or MasterCard debit card instead of punching in the PIN gives you the same protections as you would with a credit card.
Disputes Credit cards offer stronger legal protections than debit cards in case of disputes about the quality of the goods or services and billing errors. Once you notify the credit card issuer, you do not have to pay the disputed charge while the issuer investigates.
But if you've used your debit card, your account must be reimbursed. MasterCard and Visa have similar policies for credit and debit cards, though you may have to sign for your purchase in order to be covered. If you enter your PIN, the bank that issued the debit card ultimately decides whether your complaint is valid.
Credit scoreUsing a debit card rather than a credit card to pay bills and make purchases does not affect your credit score. Credit card payments are reported to the credit bureaus, but debit card use is not. Your payment history makes up 35 percent of your FICO score (the most widely used credit score), and that score determines the interest rate you will be offered when you apply for a mortgage, auto loan and other credit.
Rewards Credit card rewards programs are usually more generous than those of debit cards. You might have to spend as much as $4 to earn a point with your debit card rather than the standard $1 per point you receive when you use a credit card. You must sign for your debit card purchase and not punch in your PIN to receive points.
So using a debit card for smaller purchases, as long as you don't incur overdraft fees, makes sense. But when you're purchasing a big-ticket item, consider using a credit card or sign for your debit card purchase to preserve protections.
No comments:
Post a Comment