Although both debit and credit cards provide easy methods of payment, credit cards have better fraud protection which makes them more secure to use online. Credit card fraud can easily happen through security breaches or cyber attacks that steal your payment card information. It’s important to use the most secure payment method to protect yourself from the damaging effects of credit card fraud.
Continue reading to learn more about the differences between debit and credit cards, what credit card fraud is and which card you should use online.
What Is a Debit Card?
A debit card is a payment card that pulls money from a user’s checking account to make purchases or withdraw cash. Since a debit card is directly linked to your checking account, the amount of money in your account determines how much you can spend with the card. Debit cards reduce the need to carry cash since you have direct access to your money. They are also protected by a Personal Identification Number (PIN), but PINs are not always used for every purchase.
What Is a Credit Card?
Rather than using the money from a linked checking account, a credit card borrows money from a financial institution, allowing the user to make purchases that they’ll pay back in the future with interest. Unlike debit cards, credit cards can incur debt if you don’t repay the financial institutions the money you borrowed from them. Credit cards offer fraud protection that allows consumers to dispute fraudulent charges made on their credit cards.
What Is Credit Card Fraud?
Credit card fraud is when an unauthorized user gains access to either your credit or debit card and uses it to make purchases without your permission. Cybercriminals can get a hold of your payment cards by either stealing your physical card or tricking you into revealing details about your card, such as the card number and expiration date. Once the cybercriminal has access to a payment card, they can steal your money and make purchases that can negatively impact your credit.
Credit card fraud can be scary to deal with as it can leave lasting effects such as damaged credit, debt and even identity theft. A cybercriminal can misuse your credit card to make large purchases that can put you in debt and damage your credit. This can cost you a lot of money and make the application process for future loans difficult.
Depending on how much information a cybercriminal steals, credit card fraud can lead to identity theft in which the cybercriminal can commit crimes under your name and potentially leave you with a criminal record.
It is important to monitor your spending activity and check for any unfamiliar purchases. You should also secure your online financial accounts to prevent cybercriminals from performing account takeover attacks. Most importantly, you need to be careful with your debit and credit card online to avoid credit card fraud. If you notice credit card fraud, you should freeze your credit, contact your card issuer and report the fraud to the FTC.
Which Is More Secure: Debit Card or Credit Card?
Although both debit and credit cards offer fraud protection, credit cards are more secure than debit cards since they offer better protection. If you were to be a victim of credit card fraud, the financial institution would investigate the situation and the responsibility to repay the fraudulent charges should not fall on you. However, with debit card fraud, the money being stolen is directly coming from your bank account. Even if the financial institution investigates, the chances of you regaining your money are unlikely.
| Debit Cards | Credit Cards | |
|---|---|---|
Federal law that protects consumers from unfair billing | Electronic Funds Transfer Act (EFTA) | Fair Credit Billing Act (FCBA) |
If lost card reported before any purchases were made on it | Zero liability | Zero liability |
If lost card reported and unauthorized purchases were already made on it | If reported within two business days, could be charged $50 for unauthorized purchases. Afterward, could be charged $500, or the entire amount of the unauthorized purchases. | If reported within 60 days of receiving the account statement with the transaction, zero liability. Afterwards, could be charged $50 for the unauthorized purchases. |
If someone uses your card but doesn’t have the physical card | If the loss is reported within 60 days of receiving the account statement with the transaction, zero liability. Afterward, liable for the charges. | Zero liability |
Should You Use Debit or Credit Online?
You should primarily use your credit card online since it offers better fraud protection and keeps your money safe by using borrowed money. Using your credit card for everyday and major purchases online will help protect your money from getting stolen.
The best way to protect your credit and debit cards online is to only shop on trusted websites and avoid saving your card information to your browser or on the company’s site. You should keep your credit and debit cards in a safe physical location. If you want to store your payment cards online, you should store them in either a password manager or a digital wallet since they both use encryption and MFA to keep your cards secure.
A digital wallet is an online payment tool that securely stores payment information, gift cards, membership cards, transportation tickets and other important financial information. Through an app, digital wallets allow you to make in-person or online purchases without having to carry cash or your payment cards. They provide a secure way to store your debit and credit cards while also making convenient purchases on your smartphone. However, not all online and physical stores support digital wallets.
Using a Password Manager to Store Credit Card Information
The best tool to store your credit and debit cards online is a password manager. A password manager is a tool that securely stores and manages your passwords, but it also stores other information like your credit card numbers, all inside of an encrypted vault. When you store your credit and debit cards in a password manager, they are protected by zero-trust and zero-knowledge encryption that ensures every user needs to verify their identity to access them in your encrypted vault and protects you from security breaches.
Password managers allow users to enable Multi-Factor Authentication (MFA) to add an extra layer of security for their stored debit and credit cards. MFA requires you to provide an additional form of authentication along with your master password before gaining access to your vault. This makes it difficult for cybercriminals to get into your vault, even if your password was compromised.
When you store your debit or credit card in a password manager, you can easily use them on online stores since password managers can autofill your cards on the website. This helps protect your credit and debit cards from cyber attacks such as keyloggers. Keyloggers are a type of malware that can record a user’s keystrokes to gather sensitive information. Password managers protect your cards from keylogging attacks since you avoid typing your card information into the online store.
How Keeper Protects Your Credit Cards
You should be using your credit card over your debit card when spending online to protect yourself from credit card fraud. The best way to store your credit card is with a password manager. Password managers are protected by encryption, MFA and autofill features that prevent cybercriminals from stealing your credit card information. Sign up for a free trial of Keeper Password Manager to start protecting your credit cards online.
