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December 21, 2013

After Target fallout, what is safer to use: credit or debit?

While 40 million of Target shoppers had their credit and debit card information stolen, it looks like debit card users could face a much bigger hassle than credit card users.

Banks have been advising people if they shopped at Target during Nov. 27 and Dec. 15 with their debit card to cancel their current card and get a new one immediately. Under consumer protection laws, credit card and debit cards are treated differently. Under federal law, your personal liability for fraudulent charges on a credit card can’t exceed $50. But if a fraudster uses your debit card, you could be liable for $500 or more, depending on how quickly you report it.

Locally, Target has stores in Haverhill, Methuen and Salem, N.H.

Many experts are saying that credit cards are in fact safer to use.

“Using debit cards leave you much more exposed than a credit card,” John Ulzheimer, credit expert at CreditSesame.com, a credit management website.

The law around consumer protection laws is what gets a lot of people in trouble.

“Most people don’t keep that much money on their debit card. So even if someone used it to buy something that was 50 bucks, you could still be held liable about it,” Ulzheimer said.

Also, credit card companies have special policies in place to protect their users in the very case this happens.

“When you use a credit card, that’s not your money. It’s the bank’s. That’s not true for debit. Plus, all the major credit card companies have liability insurance where you aren’t held responsible if someone steals your information,” Ulzheimer said.

Ulzheimer says people who used their debit card at Target have more to worry about.

“They are saying that not only were the debit card numbers stolen but also the pins which makes it that much easier to hack into and use,” he said.

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