QUESTION: A listener on Twitter says his friends are telling him his liability on a credit card is much less than when using a debit card. Dave says that’s false because the liability is exactly the same.
ANSWER: Your friends are idiots. Your liability on a credit card and on a debit card—if it’s a Visa or MasterCard product—is exactly the same if it’s stolen. Zero. Go to Visa’s website, visa.com, look it up, and look under security. It’s on their site. I didn’t make it up. The debit card and the credit card, in the case of fraudulent use or theft, is 100% covered. That’s why banks are so quick to cut off a credit card or debit card if they smell an unusual transaction. Have you ever been somewhere and bought something unusual and they shut your card off? It’s gotten to where if I’m going to be traveling abroad, I just call my bank and tell them. It’s like I have to get permission to leave. It’s kind of aggravating, but they’re liable for the charges. If they see a $1,000 charge in Mexico, that could be my wife shopping or it could be theft. They don’t know, so they shut the card down. We tell them ahead of time if we’re going to be out of the country or something like that for that very reason. You are 100% covered in the event of theft or fraud on a credit card or on a debit card.