I'm sure you've noticed that when you swipe a debit card in many stores, you get an option to use it as debit or credit. Many people say that choosing the credit option is safer. Is that actually true?
Well, yes and no. The option you choose does change how the card is processed, but in the end what that means is up to the bank.
Some banks will apply the same anti-fraud protections you have on your credit card to debit cards that are run as a credit card. That may include stopping unwanted charges and a $50 liability limit.
(Debit cards have a $50 limit as well, but there's a catch -- you have to notify the bank of a fraudulent purchase within a few days. You can dispute the charges after that, but you're coming from a vulnerable position, because the money has been already taken from your bank account. That's not the case with credit-card disputes.)
Before you go crazy with the credit option, though, call up your bank and ask what protections you get running the card as credit. That way you won't be taken by surprise if something goes wrong.
Keep in mind that choosing credit will also mean extra processing fees for the store. If it's a small operation, that could hurt them or lead to higher prices in the future. In that situation, especially for small purchases, using cash would be better for everyone.
For large purchases, you might be better off just using a credit card. That way you have guaranteed fraud protection and many cards issuers include perks like an extended warranty on items purchased with the card.
On the Kim Komando Show, the nation's largest weekend radio talk show, Kim takes calls and dispenses advice on today's digital lifestyle, from smartphones and tablets to online privacy and data hacks. For her daily tips, newsletters and more, visit www.komando.com. E-mail her at email@example.com.