EagleTribune.com, North Andover, MA

December 21, 2013

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

By Sara Brown

---- — 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.

“At the very least people need to change their pin numbers but they should also get a whole new card as well,” he added.

Ulzheimer advises people to switch over to credit cards from debit.

“That’s the safest way to be,” he said.

However, for dedicated debit card users there are some steps that can protect yourself.

“People need to check their account regularly. People should no loner be looking at their statements at the end of the month. People should be regularly checking their account two or three times a week with recent and pending transactions. If anything looks suspicious, notify the bank right away,” he said.

However, credit card users need to be just at vigilant Ulzheimer says.

“They should also check their statements just as regularly. There are services where every time a purchase is made on your credit card, you get a text about it. That way you can let your bank know of any suspicious activity. It’s almost fraud proof.”

Target says they have been monitoring the situation vigorously and notified all major credit card companies.

“We have already alerted all of the networks (Visa, MasterCard, Discover and American Express) and provided the affected card numbers of guests who may have been impacted. The networks, in turn, are providing the affected card numbers to the financial institutions of our guests via a “batch” or “CAMS alert.” This alert process allows card providers to take steps to enact additional fraud monitoring. For our REDcard holders, in addition to the robust fraud monitoring system we already had in place, we have added additional layers of security and fraud monitoring to their cards,” Target PR specialist Molly Snyder said in a statement.

Most people are understandably panicked about the Target situation, Ulzheimer says there is nothing to be too worried about yet.

“While information has been breached, so far there have been no reports about people being drained financially because of this.”

Target has echoed that statement as well.

“To date, we are hearing very few reports of actual fraud, but are closely monitoring the situation,” Snyder said.

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