The two pieces of plastic may look the same, but they are very different.
For starters, when you use a credit card, you are billed for the money you spend, and
you generally have a grace period to pay it before finance charges start to pile up.
But when you use a debit card, the money comes directly from your checking account,
and there's no finance charge. If it's an offline transaction, meaning you sign a
receipt to make the purchase, the cash comes out of your account sometime after the
purchase is actually made, but no longer than a few days. If it's an online transaction,
meaning you enter a Personal Identification Number into a small computer, the money
comes from your account immediately, like it would from an Automatic Teller Machine.
This means if you buy something that costs more than what you have available in your
checking account, you will be overdrawn, and unless you have some sort of overdraft
protection on the account, you'll owe hefty penalty fees. In addition, some banks charge
for debit card purchases and these fees vary.

Differences between Debit and Credit
The chart below shows a side-by-side comparison of debit cards and credit cards.

When shopping with a debit card	When shopping with a credit card
* Money comes directly out of your checking account	* Money you owe is added to a bill and sent later.
* No extra charges apply, unless your bank or the store requires it.	* Interest charges apply after a grace period, if any.
* You have only 48 hours to report a stolen card to owe the minimum of $50.	* Once you report the loss or theft, your maximum liability under federal law is $50 per card.
* You have 60 days to report a stolen card to owe up to $500.	* There are no time limits for reporting card theft.
* Your purchasing power is limited to the money in your checking account, so you can't get into debt.	* Your purchasing power is limited to your credit limit, which may be more than you can handle responsibly.

Theft and Fraud
It's important to note that debit cards differ greatly from credit cards when it comes
to fraud protection. If your debit card is used by an unauthorized person, you'll owe
a maximum of $50, but only if you report the theft within 48 hours of the fraudulent
transaction. Wait longer, and you could owe up to $500. If you wait more than 60
days, you could lose all the money in the account. But if you're a victim of credit
card fraud, your maximum liability is $50, no matter how long it's been missing.
This disparity is caused by a variety of factors in the U.S. legal system, but some
consumer advocates are trying to get legislation to treat debit and credit cards the
same when it comes to fraud. Until then, however, it's smart to keep a close eye on
your debit card and read your bank statements carefully. And if you do find that it's
missing or you've been defrauded, call your bank immediately to request that the card
be deactivated. In addition to rules regarding theft and fraud, debit cards are often
treated differently when it comes to other consumer protections, such as no-hassle
refunds and insurance.

Tips on keeping your debit card safe

Check your wallet often to make sure your debit card is still there.

Read your bank statements carefully.

Write down the contents of your wallet, complete with debit and credit card account
numbers, and keep the list in a safe place.

Memorize your Personal Identification Number and keep it private.

Read your sales receipts to ensure you've been charged the correct amount.
Even though debit cards can lead to trouble, their benefits far outweigh the
negatives. Simply use some common sense and have fun shopping in the USA.

To be continued next week

- Balaji