Credit Card Protections Help You Shop Smart this Holiday

While using cash or a debit card to pay for purchases prevents tacked-on interest charges and helps you to stay on budget, you should still pay with credit cards this holiday season because they are the most protective payment choice.

Here’s three reasons why paying with credit cards can help you shop smart this holiday season:

1. Limited Losses. Under federal law, if a lost or stolen credit card is used fraudulently, your bottom-line liability is only $50 and many issuers waive that. It doesn’t matter when those bogus charges or made, or whether they are 10 or 100 times greater. You pay only up to $50…if anything.

Conversely, if a lost or stolen ATM or debit card is used fraudulently, the thief gets short-cut access to your bank account and you may be liable for a huge chunk of missing money. Certainly, many debit card issuers have zero liability policies. But with credit cards, all issuers must abide with these rules.

1. Season’s Thievings. During the holiday shopping season, pickpockets hit shopping malls to lift wallets. If yours goes MIA during a shopping trip or any other time its stash of cash is lost forever. But with a quick phone call to your plastic providers, those accounts are immediately frozen and replacements are issued to resume your holiday shopping.
2. Purchase Perks. Although credit card rewards such as travel miles or cash-back are one incentive to pull out the plastic, there are others depending on your provider and type of credit card. Debit cards may offer some of these benefits, but you’ll likely find multiple, and better, purchase protections with credit cards. Contact your provider for specifics, but extended return policies, price protection, damage and theft protection, extended warranties, and chargebacks are some of the protections.

For information about other scams, sign up for the Fraud Watch Network. You’ll receive free email alerts with tips and resources to help you spot and avoid identity theft and fraud, and gain access to a network of experts, law enforcement and people in your community who will keep you up to date on the latest scams in your area.