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Debit cards Use caution during some transactions

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NORTH PALM BEACH, Fla. (2/7/12)--Your debit card looks like a credit card and feels like a credit card, so it must work exactly like a credit card, right?

The truth is that your debit card and credit card differ in a big way when it comes to fraud. If a thief obtains your credit card or credit card number, you'll most likely notice the unauthorized charges on your bill. You then can report and decline those charges.

However, if a thief obtains your debit card or debit card number, transactions pull funds straight from your checking account. In the case of a fraudulent transaction, you'll need to receive reimbursement for the stolen funds. And depending on the extent of the damage, the time needed to process your reimbursement could leave you in a financial bind.

To avoid debit-card drama, be careful when swiping your debit card for some transactions. Bankrate on its website recommends using extra caution at these locations: 

  • Outdoor ATMs. Thieves often have an easier time affixing skimming devices, which steal your card's information, to isolated, easily accessible outdoor machines. Skimming devices are usually hidden over an ATM's card slot, and can be difficult to spot. If possible, use an ATM inside a financial institution or retail store. If you must use an outdoor ATM, aim for one in a busy, well-lit area, and check the card reader for any components that don't look quite right.
  • Gas station pumps. Like outdoor ATMs, gas station card readers also provide ideal opportunities for skimming. Pumps that aren't monitored closely make it easy for thieves to attach skimming devices or small cameras to a card reader without detection. Before you swipe, examine card readers for anything that looks suspicious.
  • On the Web. Making online purchases with a debit card is risky--your information can be compromised at multiple points in a transaction. Data breaches, unsecured wireless Internet connections, or malicious software on your own computer all could put your data at risk. Opt for your credit card when shopping online--and even then, only buy items from businesses you trust.
  • Restaurants. Handing your debit card over to a restaurant server at the end of a meal also can be risky. A server who disappears to run your card could be privately nabbing your card information, as well. You simply don't know--so it's better to turn to your credit card or cash in this instance.
For more information, read "Crooks Use High-Tech Scams to Commit Fraud," watch "Guard Your Plastic Cards," and listen to "Debit and Credit Card Liability, Protection From Fraud" in the Home & Family Finance Resource Center.