Debit Cards are increasingly becoming the method of choice taking the place of cash, checks and credit cards. Thanks to technology Debit cards are now more convenient than cash and checks. The use of debit cards instead of credit cards is due to a variety of reasons. The recession has led to a general lack of credit. Large discretionary purchases usually done on a credit card have declined, while small nondiscretionary debit card purchases continue. Another reason is a personal choice to prevent overspending and the associated high interest rates incurred by credit cards. This is a laudable self-help solution that really works: You cannot spend more than is in your account or linked overdraft accounts. Of course if you have a credit card as your overdraft you are back to the original credit card problem, with an overdraft fee added to the mix.
What many people do not realize is that debit cards typically provide much less protection from fraud and unauthorized use than for credit cards. In the first row of the below table (Unauthorized Use) you can see that the federally mandated maximum liability for unauthorized credit or charge card use is $50. Both Mastercard and Visa have a Zero Liability program which reduces this to zero, with certain conditions.
| Risk | Debit Card | Credit Card | Charge Card |
| Unauthorized Use* | $50 w/in 2 days $500 w/in 60 days (CA $50 w/in 60) Unlimited > 60 day | $0 before used $50 if reported | $0 before used $50 if reported |
| Account Balance Risk | Primary & overdraft linked accounts | None | None |
| Overspending Risk | Up to account balance and overdraft | Up to credit limit | Up to credit limit |
| Credit Score | No impact | Balance impacts | No impact if paid each month |
