How does using a credit card differ from using a debit card in terms of fraudulent charges?

In India, the main difference between using a credit card and a debit card in terms of fraudulent charges is the timing of the transaction. When using a debit card, the funds are withdrawn directly from the user's bank account at the time of the transaction, while credit cards allow the user to borrow money from the issuer, with the expectation of paying it back later.

If a fraudulent charge is made on a credit card, the user can dispute the charge with the issuer, and the payment can be withheld until the dispute is resolved. This means that the user's own funds are not affected, and they will not have to pay for the fraudulent charge. However, if a fraudulent charge is made on a debit card, the user's own funds will be affected, and it may take some time to recover the lost funds, depending on the dispute resolution process of the bank.

Another difference is the liability for fraudulent charges. According to the Reserve Bank of India (RBI), if a fraudulent transaction is made on a credit card, the liability rests with the bank, as long as the user reports the fraud within three days of receiving the statement. If the user fails to do so, their liability may increase, up to a maximum of Rs 10,000. On the other hand, if a fraudulent transaction is made on a debit card, the user's liability depends on how quickly they report the fraud. If the user reports the fraud within three days, their liability is limited to Rs 5,000. If they report the fraud within four to seven days, their liability is limited to Rs 10,000. If they report the fraud after seven days, their liability may increase, up to a maximum of Rs 25,000.