Credit Card vs Debit Card

This is an extract from an article on MSN. It gives a good reason why Credit cards should be used even if you have a million dollars on your Debit card!!!.

Banks typically don't use software to spot suspicious trends. Most credit card issuers use programs, like Fair Isaac's Falcon software, that can flag transactions that don't fit the user's typical pattern. But few banks employ such programs to monitor checking accounts, Crooks said, although more are expressing interest as losses increase.

Banks often don't verify a card is real. The magnetic strip on the back of your debit or ATM card includes security codes that confirm the plastic was issued by your bank. But Gartner estimates as many as half of banks don't check those codes before authorizing transactions. A counterfeiter who dummies up a card using your number is thus very likely to be able to use it for fraudulent transactions.

Banks can blame the victim. Federal law prohibits credit card companies from holding customers responsible for unauthorized charges once the customers have reported the loss or theft of their card, and most issuers waive the $50 liability they could charge for fraudulent transactions.

The rules are somewhat different for bank accounts. When a fraudulent debit charge or automatic payment is reported, a section of federal law known as Regulation E requires banks to investigate within 10 days. But banks can extend that period to 45 days if they credit the disputed amount or $2,500, whichever is less, to the customer's account.

But a bank can decide there was no fraud, experts say, and take the money back as long as it provides a written explanation to the customer.


Source: MSN Money