You know by now if you shopped at Target between Thanksgiving and December 15, you may have had your credit or debit card information stolen, including your PIN. Those numbers immediately went up for sale on black market website.
Which is safer for you to use when something like this can happen, your credit or debit card?
The good news is, thanks to a couple of federal laws, your bank account won't be drained because your liability is capped for both credit and debit card fraud. Still many people are more worried about using a debit card tied to their bank account. But do you really need to be? The answer, as many are learning with the Target data breach is: yes.
While your liability is capped at $50 on a credit card; all major credit cards have zero liability policies and that means you won't even have to pay that.
Debit card liability on the other hand is capped at $50 unless you don't report the fraud within two days, and then your liability jumps to $500.
If you never report the fraud you can lose all of the money in your checking account. And if you're missing money from your account due to fraud, your other transactions may not clear and you could be paying overdraft charges or late fees on other bills that are past due.
It's wise to be vigilant about checking your bank account for fraud on a regular basis. The whole debacle may speed up the transition form the old magnetic stripe to a computer chip which is now used in Europe. The magnetic stripe stores account data using the same technology as cassette tapes, making it easy for thieves to copy.
Banks ultimately pay the price for fraud on their customers' debit cards and that has some bankers calling on lawmakers to shift the risk of a security breach onto the retailers whose systems are compromised.
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