After a few minutes of browsing, you find a beautiful blouse that you love on a rack in your favorite store. You take it up to the counter and pay for it. What card do you pull out of your wallet?
Would it be better to pay for the object of your desires with your debit card or credit card? You’re worried about your safety here. You don’t want someone getting your information and stealing money from you.
Are credit cards safer than debit cards? That depends on your perspective. Check out this guide to learn which form of currency you should use to pay for the things that you want.
How Does Fraud Occur?
The best way to avoid fraud is to know why it happens. It can occur in a variety of different ways no matter if you’re swiping debit or credit.
If a store experiences a data breach, your personal information will be on the line. If someone steals your cards, they’ll obviously have access to your account numbers.
There are some not-so-obvious cases of fraud. Let’s say that a shop owner asks to hold your card. They could write down the numbers without you knowing. A person could dig through your garbage and grab your account statements.
Credit Cards Don’t Use Your Own Money
Besides the Farmers Visa rewards, one of the benefits of using a credit card is that it doesn’t spend your money. If someone gains access to your debit card, they can drain your finances dry.
All the money in your account that you were going to use to pay your mortgage and other bills is gone. You can dispute the charges, but it still might leave you paying your bills late.
If that happens, your credit score could take a hit, or worse. There’s a possibility that you’ll get kicked out of your home or your utility company will turn off your lights.
You’re Protected Against Fraud
When someone grabs your debit card and begins to run wild with it, you have a certain time frame to report the charges as fraudulent. If you don’t talk to your bank within two business days, they’ll charge you 50 dollars to dispute the theft.
Your liability will jump up higher the longer you wait to contact your bank. If you let it reach the 60-day mark, you could end up paying 500 dollars or more.
Thanks to the Fair Credit Billing Act, credit cards work a bit differently. In most cases, you won’t have to pay a penny. The highest your liability will ever get is 50 bucks.
That game console purchase seemed like a great idea at the time. After delivery, however, the buyer’s remorse begins to set in. It came in broken.
If you bought the console with your debit card, you’re sort of at the mercy of the company’s return policy. If you bought it with your credit card, you can dispute the charge.
You may be able to tell the bank that the item didn’t come in or arrived broken. After filling out a form, your credit card provider should give you the money back.
When Is It Safer to Use Debit Cards?
With the points that we’ve made so far, you may be asking yourself, “are debit cards safe?” There are certain situations when charging your debit is a bit safer than using your credit card.
For one, it can be easy to get carried away with your credit card and overspend. Many people put themselves in serious debt thanks to this.
For another, debit cards are better for withdrawing money at the ATM. You can get cash off your credit card the same way, but you’ll have to pay a fee.
There are ways for you to say safe no matter if you’re using your credit card or debit. By limiting your risk, you won’t have to worry about which payment method is the most secure.
Limit the Funds in Your Account
If someone steals 5 dollars out of your checking account, it’s whatever. If someone steals the entirety of your rent, you’re going to be in some trouble.
The best way to keep yourself protected is to keep the minimum money that you need in your account. Something people will do is open a checking and savings account at the same bank. They keep all their cash in their savings and move it over to their checking as needed.
Stay On Top of Your Statements
Your credit card provider and your bank should send monthly statements to either your physical mailbox or your email address. Make sure you take the time to read them.
The faster you notice a fraudulent charge, the faster you can take care of it.
Turn Off Overdraft Protection
Overdraft is a feature that most banks provide. We’ll explain what this is with an example. Let’s say that you want a pack of gum to chew while you’re traveling.
You charge this pack of gum to your debit card, but what you didn’t know was that there wasn’t enough money in your account to take care of it. The bank covered the cost of the gum and hit you with an overdraft fee.
It seems like a helpful feature, but it’s more trouble than it’s worth. You see, before the bank charged you for that gum, they tried to pull money out of your savings to take care of it.
That means if you do the method that we stated above of keeping all your money in your savings, a thief can overdraft your checking account and clean you out.
Are Credit Cards Safer Than Debit Cards? You Decide
So, are credit cards safer than debit cards? That all depends on your interpretation. If you’re not the best with money, having a debit card is better because you won’t put yourself in debt.
If you trust yourself not to go wild with your credit card, having one is safer in terms of fraud protection. Either way, both options offer a safety net of some kind. For more ways to take care of your finances, visit our blog.