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Under federal law, if someone steals your credit card you're only
responsible to pay the first Rs. 50 (for example) of unauthorized charges.
However, if you notify the credit card issuer before a thief is able to make any
charges you may be free from all liability. If the credit card is not physically
present when an authorized or fraudulent purchase is made, such as over the
internet, you're also free from liability for those charges. MasterCard and Visa
offer zero-liability protection where you won't pay any charges if someone uses
your credit card to make an unauthorized purchase. The protection offered to
debit card fraud is similar but with a few exceptions. For example, your liability
under federal law is limited to Rs. 50, the same as for a credit card, but only if you
notify the issuer within two business days of discovering the card's loss or theft.
Your liability for debit card fraud can jump up to Rs. 500 if you don't report the
loss or theft within two business days. And if you are the type of person that gives
a passing glance to your monthly bank statement, you could be totally liable for
any fraudulent debit card charges if you wait 60 days or more from the time your
statement is mailed.
Visa and MasterCard zero-liability protection applies to your debit card but
only for transactions that do not involve the use of your PIN (personal
identification number). Additional protection against fraudulent use of your credit
or debit cards may be available through your homeowner's or renter's insurance.
Check your policy or with your agent for more information about your coverage.
Also be aware that you should contact your card issuer by certified letter, return
receipt requested, after you're contacted them by phone to protect your
consumer rights. As for which card to use for that type of purchase, most experts
agree that you should use your debit card for the same of purchases you'd make
as if you were using cash. Therefore, it makes more sense to use your debit