How Do Different Credit & Debit Cards Stack Up In Terms Of Consumer Protection?

We’ve mentioned any number of times how federal laws offer more protection to consumers who make purchases with credit cards because $50 is the most you can be held responsible for a fraudulent purchase, while the sky could be the limit with debit cards. But how do the various networks compare?

The folks at have published their annual Consumer Fraud Liability Study, which provides all sorts of important information about the protections offered by not only the big four credit networks — Visa, MasterCard, American Express, Discover — but a handful of major retailers that offer their own cards.

Here are some highlights:
For Visa credit cards, holders will not “be held responsible for fraudulent charges made with your card or account information.”

The same holds true on Visa debit cards if you process the charge as a credit purchase (not with your PIN). “Any funds taken from your account due to fraudulent use will be returned to you,” reads the Visa policy.

But if you use your PIN to process a Visa debit transaction, the $0 liability is only applied if the actual transaction is processed on the Visa network. If not, there is no liability limit. As CardHub points out, it’s nearly impossible for most consumers to know which network is processing any given card transaction.

And if your PIN is used fraudulently at the ATM, Visa states, “The liability is with the issuer.”

For more, check out the policy on

Like Visa, MasterCard has a zero liability policy for its credit card users and debit card users who make purchases processed as a credit card (non-PIN), but with the following conditions:

“Your account is in good standing; You have exercised reasonable care in safeguarding your card from any unauthorized use. (Failure to register certain cards will be considered as not safeguarding your card.) Unauthorized use means that you did not provide, directly, by implication or otherwise, the right to use your card and you received no benefit from the ‘unauthorized’ purchase; – You have not reported two or more unauthorized events in the past 12 months.”

With debit card purchases made using your PIN, MasterCard puts no limit on your liability. The same thing with ATM transactions where a PIN is used, however MasterCard does give each card issuer “the discretion to establish its own policy regarding cardholder liability, in compliance with the law. The issuer will outline its policy in the cardholder agreement, and provide information about how the cardholder can report a lost or stolen card or a transaction that the cardholder did not authorize.”

There is more information at the MasterCard site.

As you might expect, Discover also offers $0 liability on fraudulent purchases made with credit cards and debit cards processed as credit. But Discover is the only one to have a $0 liability policy to both PIN-based debit purchases and fraudulent ATM transactions.

“If a person reports an unauthorized ATM transaction on their card, they will be immediately credited,” reads Discover’s policy. “Cardholder generally has at least 180 days to report the fraudulent transaction.”

Just as the others, AmEx has a $0 liability policy for credit cards. The company doesn’t offer any traditional debit card products, however it does have prepaid debit cards, for which the policy states, “if your Card is lost or stolen, you won’t be responsible for fraudulent Card charges.”

AmEx members are also not liable for fraudulent ATM transactions.

The CardHub study looked at cards branded by the following retailers — Target, Costco, Home Depot, Lowe’s, and Chevron — all of which also had a $0 liability policy for fraudulent purchases.

Want more consumer news? Visit our parent organization, Consumer Reports, for the latest on scams, recalls, and other consumer issues.