Despite many Americans using credit cards, a report in 2014 found that 43 percent of people preferred using debit cards to make payments. Meanwhile, 35 percent used credit cards and only nine percent used cash. Some customers might not realize that when it comes to recovering funds after a scam, there are more difficulties with debit rather than credit accounts.
When shopping with a debit card, cash is automatically deducted from an account, meaning that by the time fraudulent activity is noticed, the money has already gone. Worse, thieves are likely to have had access to all the money in a checking account. Debit cards remain popular, however, especially with the younger generation, who prefer to avoid the temptation of additional credit. According to expert Matt Schultz, "They like having the control that comes with a debit card." A recent poll found that 63 percent of citizens between the ages of 18 and 29 do not have a credit card.
There is good news, though - debit card issuers do also offer liability protection. In some cases, however, there can be excess fees. For example, if fraudulent activity is reported within two business days, account holders might have to cover up to $50 of the charges. This can rise to $500 for reports within 60 days.
It is important to manage credit and debit cards and, particularly in the case of online shopping, use credit accounts where possible. This will help to minimize risks and help account holders stay safe.
If you want more credit, check out MoneyTips' list of credit card offers.