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Weekly Tip: Use credit, not debit, when shopping online

With the holiday season in full swing, shopping is at its peak. But if you’re ordering things on the web, by phone, or mail order, be sure to use a credit card.

Consumers often use debit today, as these cards take the money directly out of your savings or checking account. This makes it easier to monitor spending habits. However, debit cards are not as safe as credit cards, especially when ordering online. Debit cards are not as well protected under federal law. Furthermore, since a debit card provides direct access to your account, you can be at a huge loss if someone were to steal your identity. Someone could easily drain your savings or checking account, and it may be a hard, lengthy process to get that money back. As a result, it can be much riskier to use debit cards, especially online where you are more vulnerable to hacks. 

Credit cards, on the other hand, have extensive fraud protection under the federal government. Under the law, as long as you report your loss or theft, you will not be responsible for charges you did not make. Your liability is capped at $50. So, even if your credit card is hacked, you will receive full protection and security. In addition to federal law, many credit cards offer purchase protection or extended warranty protection on things that you buy. Some will even step in to help if you need to dispute a credit card bill with a merchant.

So holiday shoppers, take this step in protecting yourself from identity theft and use credit cards when shopping online.

on Wed, 2013-12-04 10:50