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Is It Safer To Use My Credit Card Rather Than My Debit Card?

Is It Safer To Use My Credit Card Rather Than My Debit Card?

When deciding whether or not to use a credit card or debit card when completing a financial transaction, there are pros and cons to both options. Credit cards have been in existence a few decades longer than debit cards but both are well-established and make paying for products or services seamless for customers and businesses. They are not created equally however, and require an understanding of their inherent benefits and limitations before deciding which to use for your day-to-day purchases.

Credit Cards

Credit cards are a type of revolving line of credit which allows consumers to pay for transactions without currently having the funds either available or accessible at the time of sale. This is because the financial institution which issued the credit card agrees to pay for the product or service and then will accept payment from the cardholder at a future specified date. Credit card issuers make money from transaction fees and any interest that accumulates from unpaid balances carried over each month. The convenience of credit cards means consumers can pay for a $3,000 television but then pay off the transaction over a series of months with an interest charge.

Debit Cards

Debit cards came into existence to allow the same ease of convenience when making purchases without the need of being approved for a credit card. Many consumers with less than perfect credit may find it difficult to qualify for a credit card limiting their ability to make purchases online, over the phone or in person at certain retailers. Debit cards offer the same purchasing ability but are tied directly to a checking account which is both a plus and a minus. The plus is that debit card users have the same flexibility as credit card holders but a big minus is that they are unable to make purchases for more than what they have available in their checking account.

Fraud Protection

Since both credit cards and debit cards offer similar features in terms of purchasing convenience, the primary differentiator is fraud protection. Because a credit card issuer may have to absorb the loss from a fraudulent transaction, they are highly attenuated to detecting fraud. Federal law limits consumer responsibility to a maximum of $50 if a fraudulent charge is reported in writing to a credit card issuer within 30 days. Because of possible losses, credit card issuers hire fraud prevention specialists and employ automated fraud alerts. Debit cards on the other hand, have no similar protections and if a bank account is emptied due to fraud or theft the cardholder is responsible for the loss. This singular protection is what makes credit cards safer than debit cards.


So in answer to the question: Yes, it is safer to use a credit card rather than a debit card. Debit cards are a great option for consumers who do not qualify for credit cards or are looking to prevent financial mistakes of the past. Credit card use is preferred however, due to fraud protection and other benefits often bestowed to credit card holders. If you have the option, consider using a credit card over a debit card for all transactions whether it be online or in person.

Image by: David Gallagher