What if your card information is stolen when you have lost your card or you are hijacked? The card the person gets may do a lot of shopping until he reaches the limit which you obviously don’t want. There are two laws have been passed on this so that you can take measures when this happens to you. Fair Credit Billing Act or FCBA which is dedicated to solve issues regarding credit card and the other one is Electronic Fund Transfer Act or EFTA which deals with debit card. Firstly, the considerations that these laws have, to put certain situation under these legal terms will be presented for your better understanding and then you are going to be known which card to prefer in online payment. Stay tuned.
Liability taken by the card holder: Debit card
According to the Electronic fund transfer act, you have 60 days to be taken care of. If the report has been made after 60 days, no steps authority is going take to back you up or to take the liability. If the report has been made under 60 days you will be lucky enough to avail the facility to
- Take zero liability if the report has been made before any transaction took place
- Take up to $50 liability if report has been made within 2 days, whatever the amount is spent from the account under the lost card
- Take up to $500 liability if the report has been made within 60 days, whatever the amount is spent from the account under the lost card
- Take the full liability if the report has been made after 60 days, whatever the amount is spent from the account under the lost card
Point to be noted: if the card is not stolen but the number then there is another issue. You will be charged for zero liability if the report has been made under 60 days.
Liability taken by the card holder: Credit card
You will be charged for $50 maximum if the report has been made after 60 days, according to the policy of FCBA. There is no liability for the transaction made by the lost card if the report is made under 60 days. There are cards available with no liability at all, whatever the days are but report has to be made. Not all the service provider offers this card.
So, there is less hassle, simple condition and small liability if using credit card is lost.
Why use credit card in online payment instead debit card?
- The key features of credit card are distinguished from debit card when it comes to fraudulent activity. If the credit card is lost you don’t lose money but if you lose debit card the amount in the bank account is affected.
- The liability issues in credit card are more complex in compare to credit card. You have to pay up to $500 in case of late report but you pay $50 maximum in terms of credit card which may sometimes $0 in special case such as immediate reporting.
Read all articles in our shopping guide 101 for more getting more educated on online shopping.