I’ve written extensively about the advantages and disadvantages of using both credit and debit cards while traveling, but have overlooked one important difference between the two that I’d now like to address.
Simply put, credit card transactions offer consumers better protection from fraud than debit card transactions.
If someone steals your credit card you can simply contact your card company and refuse to pay for the fraudulent charges. Under federal law your obligation for those fraudulent charges tops out at $50.
Debit card theft, though, is another issue altogether.
If someone steals your debit card the money simply vanishes from your account and you are responsible for contacting the bank and sorting through the charges. If you don’t report the fraud within two days you may be liable for up to $500 and if you wait more than sixty days to report the theft you could face unlimited liability.
So what’s a smart traveler to do?
1) Always be vigilant about checking your statements to ensure they match your receipts.
2) Immediately report any suspicious charges to your bank or credit card company.
3) Never give anyone your PIN.
4) When using an ATM, block the keyboard with your body so that no part of your transaction is visible to anyone standing behind you.