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Understanding debit cards, credit cards and identity theft

Technology continues to grow in its sophistication, particularly when it comes to combatting fraud involving credit and debit cards. The tug-of-war between companies who provide these services and hackers looking access accounts for nefarious actions that line their respective pockets.

While all financial service companies tout their top-of-the-line credit protection, criminal enterprises find a way to get past the most challenging of barriers. Some are better than others in protecting consumers from fraud.

Debit vs. credit cards

Debit cards are akin to writing a check and account for more than $1 trillion in purchases by consumers throughout the United States. The money to purchase something comes directly from the bank account. Usually, the VISA or MasterCard logo is prominently displayed.

Credit cards are used by more than 90 million households domestically, with VISA, Mastercard, Discover, and American Express being the most high-profile. Issued by various institutions, consumers are provided a specific balance that can be paid off over time. These accounts can also offer an option of withdrawing cash.

Which is safer?

Yet, with all those perks, various forms of theft and data breaches can result in identity theft for consumers. In the end, credit cards have the advantage due to the inaccessibility to an individual’s bank account. Victims are usually allowed 90 days to report unauthorized transactions.

While debit cardholders will likely be “made whole,” the headaches of overdrafts and inaccessibility to the account create significant inconveniences, particularly during the holiday season. In addition, banks have a smaller window for notification, oftentimes two days for unauthorized debit card purchases.

Differences exist in handling fraudulent transactions. Both credit card and debit card users should be vigilant in protecting their accounts. That starts with shopping on secure sites, denoted by the lock on a screen’s lower right-hand corner. Staying away from public Wi-Fi and other types of unsecured online access can also help prevent problems, as does avoiding storage of personal and payment info on retail sites.

The holiday season is a hotbed of criminal activity. Simple steps to protect yourself can make a significant difference towards avoiding disaster during a time where you should be celebrating with family.