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Debit Card Protections You Should Know About

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Debit cards have become the payment option of choice for many consumers today, because they offer the convenience of paying for purchases without having to carry cash or write a check. But some have concerns about debit cards because they haven’t offered the same protections that credit cards have.

Gratefully, debit card policies have gotten better over time, thanks to federal and state laws and card issuers’ responses to consumer complaints. Here are several debit card protections you should know about.

Debit Card Loss Liability Protections

The biggest concern consumers have had about using a debit card is the loss liability in case the card is lost or stolen and used fraudulently to make purchases or withdrawals from your bank account.

Over the years, federal and state governments have created laws that limit a consumer’s liability, and MasterCard, Visa, and issuing banks have done the same. Here is a quick overview of debit card loss liability protections.

1. Federal Limits to Debit Card Loss

If your debit card is lost or stolen and used fraudulently, federal law limits your loss to $50 if you notify your financial institution two business days after learning of loss or theft. It then goes to $500 until 60 days after the statement is mailed and becomes unlimited thereafter. By contrast, the liability for a credit card is limited to $50 for any fraudulent use.

2. Visa and MasterCard Zero Liability Policies

Both Visa and MasterCard now offer zero liability policies to protect you from unauthorized charges, and many issuing banks offer their own zero liability programs as well.

Visa’s Zero Liability Policy – If your Visa Debit card is lost or stolen and fraudulent activity occurs, you are protected by Visa’s Zero Liability policy. Whether purchases occur online or off, you pay nothing for fraudulent activity.

MasterCard’s Zero Liability Policy – As a MasterCard cardholder, you will not be held responsible in the event of unauthorized purchases provided that the following conditions are met:

  • Your account is in good standing.
  • You have exercised reasonable care in safeguarding your card from any unauthorized use. Unauthorized use means that you did not provide, directly, by implication or otherwise, the right to use your card and you received no benefit from the “unauthorized” purchase.
  • You have not reported two or more unauthorized events in the past 12 months.

MasterCard’s Zero Liability does not apply to cards that were issued for commercial, business or agricultural use (unless the card is listed on the MastercardBusiness.com website), those “anonymous” prepaid cards that you can buy in stores (until you have registered the card with the issuing financial institution), and in cases where a PIN was used for the unauthorized purchase.

When it comes to debit card loss protection, the most important thing is that you report a lost or missing card right away. I also recommend that you monitor your accounts online so you can report any potential fraudulent use as soon as possible.

Loss protection varies between Visa and MasterCard and between the banks that issue them, so be sure to contact your bank to know what protections your debit card comes with.

Use Your Debit Card as a Credit Card

Credit card issuers give you added protections when you use your debit card as a credit card and sign for your purchases, like:

  • Continuous fraud monitoring to detect suspicious activity on your debit card.
  • Access to identity theft assistance to help you recover your identity and prevent further problems.

But beyond that, my wife and I prefer to use our debit card as a credit card for the simple reason that it makes returning purchases a whole lot easier. If you use your debit card as a debit when making a purchase, and need to return the item, many merchants will give you the cash instead of returning the money to your bank account.

We want the money to go back into our account every time, so it doesn’t get spent on other things, so we we always use our debit card as a credit card.

Debit and ATM Withdrawal Limit Protection

Most banks limit your daily cash withdrawals using your debit card to $1,000 per day, though again, this varies. You can always ask your bank to raise or lower this, depending on your spending habits.

Debit Card Photo Security Protection

Some issuing banks offer this optional feature which lets you add your photo to your debit card to help protect yourself against fraud. It helps prevent others from using your card if it’s lost or stolen and enables merchants or others to identify that you’re the one authorized to use the card.

Debit Card Purchase Protection

Some issuers offer added protections for purchases made with a debit card. Again, these special offers vary from bank to bank, but here’s a general overview of four purchase protections offered by MasterCard.

1. Extended Warranty

MasterCard doubles the original manufacturer’s or store brand warranty for up to one year when you pay with your eligible MasterCard card.

2. Price Protection

Should you find a lower price for a new item within 60 days from the date of purchase using your eligible MasterCard card, you may be reimbursed for the price difference.

3. Purchase Assurance

Provides coverage for most items you purchase with your eligible MasterCard card if the item is damaged or stolen within 90 days of the date of purchase.

4. Satisfaction Guarantee

If you become dissatisfied with a product you purchase using your eligible MasterCard card within 60 days of purchase, and the store will not accept a return, you may be eligible for a refund for the cost of the product up to $250.

Laws and policies change, so be sure to check with your debit card issuer for the most current list of debit card protections that are available to you.

Editor’s Note: If you’re looking for a great cash back debit card, try the PerkStreet Cash Back Debit MasterCard (and read our review for the full scoop).

Which of these debit card protections mean the most to you? Leave a comment!


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