Credit Card or a Debit Card: Which is Safer?

While debit cards that can be used as credit cards was a great breakthrough for both the consumer and the banks a couple of decades ago, there are definitely pluses and minuses to both the consumer and the banks in terms of safety and credit.  

On the plus side, when consumers use the debit card, it can be considered more healthy in the sense that it is easier to keep track of how much they really have in terms of disposable income. Additionally, the more a consumer relies on credit cards, the more likely it is that he or she is paying high interest on revolving debt. However, there is a counter argument to that logic that may have serious consequences of a different kind both on the consumer’s credit and safety. 

Gates Marshall, Director of Cyber Services at CompliancePoint, a cyber security and risk mitigation consultative firm, says that consumers should use credit cards over debit cards for their transactions whenever possible:

“When it comes to cyber security, it can be more beneficial to use a credit card rather than a debit card — especially in today’s marketplace where consumers pay more often than not in the online environment. Most banks will tell their customers that they are not liable for fraudulent charges. However, using a credit card puts shoppers in a better position to dispute any unwelcomed charges that may come about from online shopping. 

"The difference is in the amount of time it takes to recover unauthorized transactions.  Permanent reversals on debit charges can take longer, sometimes up to thirty days depending on which bank you use.  When you use a credit card, it’s quicker for these charges to fall-off once disputed, or simply appear on your next statement. For example, if you pay your bills through your debit card and a large amount of money is compromised, and it can be more of a pain dealing with bounced checks and payments that you then become liable for.  Using a credit card rather than a debit card helps to better protect your finances during the holiday season both online and in-store.”