Fraud Protection

• Consumer liability is limited to $50 in both credit and debit card transactions under federal law. Both credit and debit card issuers offer a "zero liability" policy on unauthorized usage. You eventually get a refund of your money in a debit or credit transaction dispute.
  
  

Monetary Impact

• Because of the nature of debit cards, a fraud scam will hurt your wallet more if you used a debit card than if you used a credit card to make the same purchase. A bank has more incentive to investigate and resolve credit card scams because its money in on the line, not yours. A consumer has until his next billing cycle to detect and dispute an unauthorized credit card transaction. In contrast, an fraudulent debit card transaction hits your account immediately and can cause you to rack up fees, such as bounced check fees, in the interim before the bank refunds your money.
  
  

PIN Vs. Signature Transactions

• Debit cards allow you to use a personal identification number or sign for your purchases. However, signature-based transactions are less secure than PIN purchases. You can always change your PIN, but using a signature can cause difficulty particularly if it is significantly different from how it shows up on other forms of identification used to approve transactions such as a driver's license.
  
  

Avoiding Fraud

• Use credit cards, particularly for large purchases, to reduce hassle of potentially disputing unauthorized transactions. If you are using a debit card, choose to use your PIN rather than sign for purchases, if possible. Most retailers prefer that you use your PIN to make purchases anyway. In contrast, banks would rather you use sign for debit card purchase because they get earn higher merchant fees per transaction. Other ways to avoid debit and credit card scams are to check your balances and statements regularly and keep your PIN private and in secure place. If you suspect that you are a victim of fraud, contact your bank immediately.