Theft

A debit card is no more or less secure than a credit card. After all, it's just a piece of plastic that can be used by anyone who forges your signature on a receipt or orders something from a Web site. But you have bigger liabilities and the potential for more headaches if your debit card is stolen.

If your credit card is stolen, most credit card companies will only hold you liable for up to $50 of purchases, no matter how much has been charged against your account. Usually, that's the most you're liable for, no matter how long it takes for you to realize your card has been stolen (each card account has different theft policies, so check the fine print for your cards).

But debit cards are different. Under federal law, if you report a debit card as stolen to your bank or brokerage within 48 hours of the theft occurring, the most you'll be held responsible for is the first $50 of purchases made with your stolen card. If you wait between two and 60 days to report the theft, you're responsible for up to $500. If more than 60 days pass before you report the theft, you're responsible for the entire amount. Both Visa and MasterCard say that if a thief makes purchases with your debit card and you report it as stolen to your financial institution within 48 hours of the theft, you aren't liable for the purchases made with your card, and the money is supposed to be credited to your account.

Sounds similar to the protections of a credit card, but there's a catch. The balance in your bank or brokerage account can shrink quickly if your debit card is stolen. Banks are allowed to take up to 20 days to restore the stolen amounts to your account, as they investigate the alleged fraud. In the meantime, you could potentially be out thousands of dollars, and you could be short money that you need to pay your mortgage or other bills. And if you've already written some checks based on the amount you initially had in your account, those checks will start to bounce -- and that means more fees from your bank. (Some banks will waive overdraft fees if you report the stolen card early, so check with your bank to see what it will do in this situation.)