Under federal ATM debit card law, Regulation E, you may be held liable for unauthorized transactions in 3 tiers:...
Yes, there are limits on liability -- but those limits also have caveats.
>> 1. You have to prove to the bank's satisfaction that the transaction was fraudulent before the bank will correct it. In the case of a disupte between you and a merchant as to the amount of a legitimate transaction, this could take some time or even be impossible.
>> 2. Even if you do satisfy the bank that the transaction is fraudulent, the fact remains that your money is gone from your account until the bank makes the corection because the bank takes the cash out of your account when the transaction occurs.
On a credit card, by contrast, the money stays in your bank account until you write the check to pay the bill. If there's an improper charge, you still have the cash available while the bank is processing the correction.