Comment by jjav
4 years ago
> If your issuer contractually offers zero liability for debit fraud, that is just as binding as regulations – and most do.
Every bank card or account I've ever had regularly send out notices saying they have changed their terms of service and your continued use of the account indicates your agreement to the new terms.
In other words they can change those any time they want unilaterally and you probably won't even notice (because who reads those terms of service?)
You may also want to read all the fine print to see if they carve themselves any exceptions.
The great benefit of the protections under credit card regulations is not having to worry about any such shenanigans. The bank can't change the regulation so you know you're always protected, full stop.
Also remember that fraud on a debit card hits your account balance immediately, even if you can later argue to have it credited. Fraud on a credit card simply hits the credit card and can't touch your real money. Think of a credit card as cloudflare layer for your bank account agains fraud DoS.
I'm always very puzzled as why in the US one would ever use a debit card (I say US because I'm not familiar with regulations in other countries). A credit card offers stronger protections, stronger account isolation and cash back rewards.
> [...] fraud on a debit card hits your account balance immediately, even if you can later argue to have it credited. Fraud on a credit card simply hits the credit card and can't touch your real money.
It can touch your real credit score (if not resolved in your favor), which directly correlates with your ability to continue using credit cards.
And either way, you lose liquidity until the provisional credit (which is very soon in both scenarios, also required by law!), although admittedly money in a checking account is slightly more liquid since you can pay rent and cash-only expenses with it without incurring interest changes.
> I'm always very puzzled as why in the US one would ever use a debit card
Many people don't have credit, don't feel comfortable with the possibility of having to pay absurd interest rates in case they can't make a payment, or a combination thereof.
> It can touch your real credit score (if not resolved in your favor), which directly correlates with your ability to continue using credit cards.
The topic of this thread is real fraud (as opposed to someone claiming fraud on a charge they actually made). So, it will always be resolved in your favor, that's my point here. Regulations on credit cards mean it will always be resolved in your favor (assuming actual fraud). So, no, it won't impact your credit score.
> assuming actual fraud
That's a load-bearing assumption here!
Yes, whenever a credit card fraud investigation will be resolved in your favor, so would it be for a debit card – and the outcome is "no money lost" in both scenarios as well.
But in the odd case a credit card issuer does not side with you, are you absolutely sure that they would just silently drop the pending balance and not report you for a missed payment if you decide to not pay? (Yes, there is recourse against that – but so is there against a Regulation E debit card fraud case, at least as far as I know.)
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