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There is a functional difference in how credit/debit cards work, though. With credit cards, you get an invoice with fraudulent charges at the end of the month.
by notsapiensatall 4y ago
There is a functional difference in how credit/debit cards work, though.
With credit cards, you get an invoice with fraudulent charges at the end of the month. You can choose not to pay those charges, citing fraud. The bank will clear the charges if they agree.
With debit cards, the money is withdrawn directly from your account. You can report the unauthorized withdrawal, and the bank will reimburse you if they agree. In the meantime, you don't have access to the money.
- denton-scratch 4y agoHowever, in the UK there is the Direct Debit Guarantee: the company holding your DD mandate can't withdraw more than you mandated, nor on some other date than the date you specify. Otherwise you have a claim against your bank, and they have no defense.
- 988747 4y agoWith credit cards the disputed charges will still decrease your credit limit, no? So the functional difference is much smaller than you think.
- magicalhippo 4y agoAnd unlike a credit card, it's easy to vary the risk/limit with a debit card. Just keep the main funds on a separate, non-card accound, and transfer to the debit card account as needed. I usually keep around $200 on my debit card, which means I lose at most $200. This way I also get a sense of my spending in terms of how often I have to transfer. If I need to pay for more, I just transfer before paying. Takes me about 2 seconds with an SMS or through the bank app.