Debit vs. Credit Card Liability

Most credit cards offer fraud liability, which means you will not be out any money, or at least not more than fifty dollars if you are a victim of fraud or theft. Of course, you need to be current on your payments and are required to report any loss or theft as soon as you discover it.

Debit card users need to notify the bank or credit union within two business days of discovering the loss or theft of the card. The bank or credit union cannot hold you responsible for more than the amount of any unauthorized transactions or $50, whichever is less. Also for debit cards, if you wait more than two days, but fewer than 60 days after receiving your statement, you can be liable for up to $500 in charges. If you wait more than 60 days to report debit card fraud/theft, you could be liable for all the money taken, plus funds in a savings or other account linked to your debit account.


A recent survey showed 66 percent of Americans say they are more likely to trust debit cards than credit cards. Those folks should think a bit more about what it could cost them to use a debit card vs. a credit card.

Origin of Credit Cards

In 1949, Frank McNamara, an executive at the Hamilton Credit Corporation, was embarrassed to find himself short of cash when it came time to pay for a dinner with clients at a New York restaurant. Charge accounts were already common, allowing customers to add up a tab at certain establishments and pay it later, but those accounts were only for each specific business. McNamara had the idea of making a card which could be used at multiple unconnected upscale New York restaurants. Diners Club would pay the restaurant, and the diner would pay Diners Club, plus interest. Diners Club's had 20,000 members in its first year, who could use it to pay for services at 28 restaurants and two hotels.

How to Repair a Credit Card

The dark stripe on the back side of the credit card is made up of a bunch of tiny magnetic particles bound in plastic. The particles are arranged in magnetic and non-magnetic “zones” to encode the data, like your account number, expiration date, etc., that the card reader needs to process the transaction. When you swipe the card, the card reader reads the information by detecting the changes between the zones.

The strip is delicate, and the data on it can be corrupted by exposing it to a strong magnet or scratching it. Some of the magnetic particles can get dragged out of position. If enough magnetic bits move into a non-magnetic space to create a weak signal, the data gets corrupted and the card reader gets an error.

Applying Scotch tape to the magnetic stripe, encasing the card in a plastic baggie, rubbing the card on clothing, or wrapping the plastic in a dollar bill or a register receipt may enable a cashier to complete the transaction. Also, licking the mag stripe, applying and removing Scotch tape, or rubbing it on your clothes can remove dirt and debris that may be preventing the reader from accepting the card.

When the cashier puts the card in a plastic bag, it creates a spacer so the card slides through the reader with a slight separation between the data stripe and the stripe-reading head. The separation weakens the signal and cleans it up. With just a little bit of magnetic material in them, the contaminated non-magnetic zones still have a much lower magnetic strength than the parts that are supposed to magnetized. Increasing the distance between the card reader and the corrupted zones is enough to get the reader to read those weak parts as non-magnetized again.

Fugitive Glue

If you ever received a credit card, it was likely stuck to a piece of paper with some icky glue that you can rub off. The name of the glue is Fugitive Glue.

It is a low tack adhesive, which means that it is easy to remove. It leaves a minimal residue on the paper and card. The glue is used for marketing materials, as well as for mailing credit cards. The beauty is that fugitive glue tends to lose most of it's stickiness after the first application and cannot be reused. Hmmm, interesting name for credit card use.

Smart Credit Cards

Here is something coming to your wallet, a new MasterCard that has LCD screen and keyboard. The credit card with an LCD display and built-in keyboard has been launched in Singapore by MasterCard  The card will be available from January before being rolled out globally.

The card has touch-sensitive buttons and the ability to create a one-time password. Future versions of the card could display added information such as the remaining balance or display information such as loyalty or reward points or recent transaction history.

Last year, Visa announced a similar card with interactive functions. Smartphone manufacturers are hoping that enhanced credit cards will be quickly replaced by near-field communication feature that many smartphones already have.