Sign on the Line for the Best Protection

Physician's Money DigestJanuary 2006
Volume 13
Issue 1

Money

Money

Finally, an answer to the persistingquestion, "Debit or credit?"According to, the smart answer is "credit,"evenif you use your bank's ATM card to makepurchases. When you choose to sign on theline rather than punch in your PIN, physician-consumers gain liability protectionnot afforded to them through debit.Purchases that require a signature gothrough a Visa or MasterCard network, butelectronic fund transfer systems, such asNYCE and STAR, process PIN-based transactions,which do not offer the same liabilityprotection. You may also lose when itcomes to earning rewards points. Althoughrewards programs are becoming moreavailable to debit cards, consumers usuallyearn less for debit transactions than theywould for credit, say, one point for every$3 debit purchase vs one point for every$1 paid with credit. Choosing debit overcredit doesn't help with transaction feeseither. Last year the Federal Reserve foundthat 14% of banks charge for PIN-basedtransactions. With an average charge of$0.75, estimates that a $40 trip tothe grocery store could result in a surchargeof about 2%. The article also advisesthat the only reason to use debit at thecheck-out counter is when you need cash.

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