1) If there is fraud, it is YOUR money that is missing, which means you do not have access to it while things are being investigated and/or fixed, or before you discover the issue. Your bank or CU may make it all good for you in the name of customer service, but until they do, it is YOUR MONEY that is affected, not the banks. With a credit card, when there is fraud, it is the bank's money that is missing.
2) The legal protections in the case of fraud are greater for a credit card than a debit card. IANAL (and I don't play one on TV) so I don't remember all the details, but the max $50 liability as with credit cards, etc is different or does not legally exist with debit cards, amongst the differences. Now, many banks and CU extend the same protections to their debit cards as they do their credit cards, because they'd rather you used the debit cards in many cases, but I do not believe they are required to by law. Even if they do, see #1 above.
Yep, as I pointed out with my link, the law is different for credit vs debit. Yes, it is true that your bank will make good on it for you, but they don't have to. Plus, in my experience, it has been much more difficult to get a bank to remove an NSF fee from your account if a fraudulent charge puts you into an overdraft situation plus, if a check comes in while your bank is resolving the issue (even if it is a temporary debit), you may be responsible for any fees to the person/company and the bank that cashed the check.
Worst of all, most people don't even realize that a fraudulent charge has been made to their debit card until they try to make a purchase with it. I am pretty strict about confirming credit card charges, but it was by accident that I saw an fake charge against my debit card because I don't think about fraud there. I only use my debit card for grocery purchases (left over from the days of checks and also because I can draw out cash from supermarkets without any ATM fees) but somehow, had what looked to be a Square payment charged back against my debit card.
fwiw, I also keep the majority of my money in my savings account and only move enough money into my checking account to cover any checks or ATM transactions so unraveling these types of messes (since I have overdraft protection) is a big hassle as well even though my credit union is very accommodating.
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It's not "horrible" for your credit rating. You get a slightly higher credit boost if you carry a small balance but keep your cards current. But it's quite possible to get an awesome (>800) credit score while paying off all cards in full every month.
My score is >800 and I pay my cc's in full 99.9% of the time.
Comments
1) If there is fraud, it is YOUR money that is missing, which means you do not have access to it while things are being investigated and/or fixed, or before you discover the issue. Your bank or CU may make it all good for you in the name of customer service, but until they do, it is YOUR MONEY that is affected, not the banks. With a credit card, when there is fraud, it is the bank's money that is missing.
2) The legal protections in the case of fraud are greater for a credit card than a debit card. IANAL (and I don't play one on TV) so I don't remember all the details, but the max $50 liability as with credit cards, etc is different or does not legally exist with debit cards, amongst the differences. Now, many banks and CU extend the same protections to their debit cards as they do their credit cards, because they'd rather you used the debit cards in many cases, but I do not believe they are required to by law. Even if they do, see #1 above.
Yep, as I pointed out with my link, the law is different for credit vs debit. Yes, it is true that your bank will make good on it for you, but they don't have to. Plus, in my experience, it has been much more difficult to get a bank to remove an NSF fee from your account if a fraudulent charge puts you into an overdraft situation plus, if a check comes in while your bank is resolving the issue (even if it is a temporary debit), you may be responsible for any fees to the person/company and the bank that cashed the check.
Worst of all, most people don't even realize that a fraudulent charge has been made to their debit card until they try to make a purchase with it. I am pretty strict about confirming credit card charges, but it was by accident that I saw an fake charge against my debit card because I don't think about fraud there. I only use my debit card for grocery purchases (left over from the days of checks and also because I can draw out cash from supermarkets without any ATM fees) but somehow, had what looked to be a Square payment charged back against my debit card.
fwiw, I also keep the majority of my money in my savings account and only move enough money into my checking account to cover any checks or ATM transactions so unraveling these types of messes (since I have overdraft protection) is a big hassle as well even though my credit union is very accommodating.
My score is >800 and I pay my cc's in full 99.9% of the time.