Should you use you debit card or your credit card when you make online purchases? Most experts recommend using a credit card since you have more protection.
Credit card purchases are protected under the Fair Credit Billing Act. If you want to dispute a charge on that you made, you can call your card issuer and request a charge back. They can legally withhold the payment from the retailer until the issue is resolved. For fraud, your liability is limited to $50, however Visa, Master Card, American Express, and Discover all offer zero liability.
Debit cards, on the other hand, are covered under the Electronic Funds Transfer Act and have different rules. If you purchase with a debit card, odds are that the retailer all ready has your money. The bank doesn't have to credit you the disputed amount while they investigate. You'll be forced to deal with the retailer to try to work things out. For unauthorized transactions, if you notify the bank within two days your liability is limited to $50. It increases to $500 for 2 to 60 days, and is unlimited after that.
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