Friday, November 6, 2009

The downside of debit cards

Posted By: Sara Sindelar

Rising rates and soaring credit-card fees mean many are switching to debit cards. But there are risks to using debit cards as well.

By Gerri Willis, CNN personal finance editor

NEW YORK (CNN) -- Out: credit cards. In: debit cards. As more and more Americans shun traditional credit cards, they're turning to debit cards. But you should know there are downsides to debit cards too.

1. Security

This can be a big issue -- You know that if your credit card is stolen, you're not responsible for unauthorized charges over $50. But if your debit-card number is stolen, you have fewer protections. First off, you have to report any misuse within two days to get the same $50 limited liability. If you miss that deadline but you report the loss or misuse within two months, you could be on the hook for up to $500. After 60 days, your liability is unlimited. Card issuers do have different policies though-so make sure you go through the fine print says Curtis Arnold of

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