Redit or Debit? Your Decision Really Matters

By Katelyn Hayes

using debit cards online

Debit cards are a great alternative to credit cards, especially for those who have been less than lucky securing a major credit card. But shopping with debit cards β€” particularly online β€” can have its dangers. If someone steals your debit card number, your entire checking account is exposed. Within minutes, identity thieves can drain your account and set you back financially for years.

Some prefer using debit cards to shop online because they provide the same instant “click and ship” gratification as traditional credit cards, but without any of the hang-ups β€” like spending limits and high interest rates. Credit cards also make it easy to accumulate unwanted debt that you can wind up buried under for years to come.

Even though irresponsible credit card use has its pitfalls, credit cards are still the safest option when shopping online. Using a debit card to shop online can expose you to much further-reaching financial ramifications. But with a little diligence, you can protect yourself from debit card fraud.

Fraud protection: credit vs. debit cards

Bank-backed debit cards don’t offer clients the same fraud protection as credit card companies. You can find yourself left holding the bill if you don’t report a theft in a timely manner.

Credit cards. Under federal law, you’re only liable for $50 of any fraudulent charges made on your credit card before you report the theft, and not at all responsible if you report the card stolen before the thief gets the opportunity to use it.1

Debit cards. If you report a theft within two days, you’re only liable for $50. After the two-day cutoff, you’re liable for up to $500. After 60 days, you could get stuck with the entire bill.1

Important facts about debit cards

Banks treat debit card transactions the same as traditional checks, only much faster. Funds are taken directly from your checking account the instant a transaction is approved. This “instant access” makes the danger of over-drafting your account very real if you’re not careful to maintain a well-balanced checkbook. It also makes it very easy for thieves to drain your accounts just as quickly.

There’s a risk involved anytime you transmit personal information over the Internet, but the risk greatly increases when shopping online with debit cards. Credit cards are a better alternative.

Safely using debit cards online

Here are a few tips to help protect your debit card while shopping online:

If you must use a debit card to make an online purchase, make sure you trust the merchant you’re ordering from.

ONLY shop secure sites from secure networks. Look at a site’s web address before entering your debit card and personal information. If the URL begins with “https://” instead of the usual “http://,” that means it’s secure. Also, make sure the wireless connection you’re shopping from is secure.

Update your computer security software. Being proactive to protect your debit card information online can go a long way toward helping you avoid becoming a fraud victim.


1″Debit cards too risky for online shopping,” Credit Union National Association, Dec. 10, 2007

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