Credit Card vs. Debit Card: Which One is Safer Against Fraud?

By Mira Sagrado, Digital Marketing Head, RCBC Bankard

When shopping online, most people either use a credit card or a debit card. Some people use both, while others prefer just one. Having a debit card provides many of the same benefits as a credit card. You can use it to pay for purchases quickly and withdraw cash from an ATM. On the other hand, credit cards allow users to purchase and pay the amount in installments.

Should you use credit or debit cards when shopping? Although credit and debit cards are safer to use than cash, each has its own risks, depending on the situation.

Credit Card vs. Debit Card Fraud

Fraudulent charges on your credit card may be easier to recover, unlike when charged to your debit card. That’s because credit cards offer better consumer protections than debit cards.

If your credit card is lost or stolen, you are not liable for the fraudulent charges. The same is true if someone uses your credit card number without your permission. If a thief makes unauthorized purchases on your credit card then tries to withdraw cash from an ATM, you are not liable for those withdrawals if they are proven to be fraudulent.

Debit cards, meanwhile, come with fewer consumer protections. If someone gets your debit card and drains the account, you are responsible for the charges, even if you report the card lost or stolen right away.

With a debit card, it’s also possible for the thief to use your personal identification number (PIN) to withdraw cash at an ATM, though most banks will cover any losses in this case. It’s always recommended to check your bank’s policy about fraudulent activities to ensure your protection.

Tips to Avoid Credit Card and Debit Card Fraud

  • Change the passwords of your credit and debit cards frequently

Update your passwords regularly. It’s easy to let this slip, but creating strong codes is key to keeping your information and money safe. The longer the password, the better. Moreover, remember not to use the same passwords for all your accounts.

  • Avoid using an unsecured wireless network

Avoid public wireless networks such as those in coffee shops, libraries, and airports when shopping or making any transactions online because they can make you vulnerable to hackers. Scammers can easily set up fake networks that appear authentic and steal your sensitive data, such as credit card information or passwords.

One way to guarantee a secure connection is to ensure that the internet address begins with HTTPS and not just HTTP. The HTTPS scheme or protocol means that data being exchanged between your computer and the site is encrypted. Being extra cautious can help you avoid credit card scams or identity theft. 

  • Set alerts and notifications to monitor activity on your account

Notifications through the app or sent via text will help you track your bank activity easily. Regularly check them for information about deposits, withdrawals, purchases, and other transactions that are out of the ordinary for your account.

Look through all of the charges on your account statement or register every month. This will let you spot any unauthorized charges at once, making it easier for you to work with your bank or credit union and get the charges reversed.

  • Contact your financial institution

If you think your credit card has been compromised, report this to your provider immediately. The company may freeze payments until the fraud is resolved, offer a temporary card number, or simply cancel your account and send you a new card.

If your debit card information has been exposed, alert your bank first. Then, file an affidavit with the police at the precinct closest to where you lost the card or where it was stolen.

Reasons Why Credit Card is Safer Against Fraud

Credit: RODNAE Productions via Pexels
  • Credit cards have fraud protection

Credit card institutions have fraud protection policies in place to protect users against purchases made by someone unauthorized, such as when they become victims of identity fraud. If someone steals your credit card information and makes purchases with it, the card issuer is responsible for those losses. Debit cards are linked directly to bank accounts, putting more money at the risk of getting stolen and lost for good.

  • Credit cards are safer to use online

Your information is encrypted when you buy something with your credit card online. If a hacker tries to access the information, they will see only encrypted data that makes no sense without the key needed to decrypt it. However, note that it still depends on the security of the website you’re shopping on and the device you’re using.

  • Credit card charges are easier to dispute

Lost or stolen credit cards are often canceled within 24 hours of being reported, which means criminals won’t be able to use your card even if it’s in their possession. But with a debit card, the damage is done once the money is withdrawn from your bank account.

In Conclusion

Although they are similar in terms of features, debit cards and credit cards are quite different when it comes to fraud protection. Ultimately, they’re both very safe as long as you take the proper precautions and become a responsible borrower or debit cardholder.

Both debit and credit cards can be used safely; it all depends on your usage behavior and how you choose to handle your finances.

Mira Sagrado is the Digital Marketing Head of RCBC Bankard, a Card Servicing entity of Rizal Commercial Banking Corporation (RCBC). With her passion for turning creative ideas into effective campaigns, she leads the development of all digital marketing programs of RCBC Bankard. Outside work, she expresses her creativity through photography and writing.

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