Are Credit Cards Safer than Debit Cards?

December 30, 2013, Written By Lynn Oldshue

With the new year approaching, some consumers make a resolution to cut up their credit cards and use only their debit cards. While doing this will enable you to just spend the money you have, you need to consider the additional security risks with debit cards.

With a fraudulent credit card transaction, you can only be held responsible for $50 of the cost. In the case of a debit card transaction, you might be responsible for as much as $500, depending on how quickly you make a report. You might not be liable for any of it at all if you report it fast enough.

But also consider how each card works. When a thief uses your debit card to make an illegal purchase, your bank account is out the money until you can prove it was a fraudulent transaction. With an illegal credit card transaction, the issuer is out the money until the situation is resolved.

In either case, it is important to monitor your financial accounts closely. That is one way to quickly spot any questionable activity and report it to the authorities.

When a breach occurs on your credit card, most issuers will release a credit to your account right away. Some banks can take as long as two weeks to provide this money. This does not impact security as much as convenience, since it may force you to figure out a different way to pay the bills in the meantime.

Before you get rid of your credit cards completely, consider keeping at least one around for backup. It is beneficial for you to use your credit card to make small purchases each month, and then pay back that money through your bank account before the due date. You’ll get rewards with certain cards and improve your credit score due to the low debt utilization ratio.



The information contained within this article was accurate as of December 30, 2013. For up-to-date
information on any of the terms, cards or offers mentioned above, visit the issuer's website.


About Lynn Oldshue

Lynn Oldshue has written personal finance stories for LowCards.com for twelve years. She majored in public relations at Mississippi State University.
View all posts by Lynn Oldshue