September 15, 2016

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Debit or Credit? 3 Things To Keep In Mind

As our world becomes increasingly digital, many of us are opting to pay for purchases using debit cards rather than cash. Debit cards are easy to use, and the money comes right out of your bank account, so you don’t have to worry about paying it back later (or worse, paying it back with interest). However, the reasons that you prefer your debit card are the same reasons that identity thieves love them too. The more you use your debit card, the more likely criminals are to find opportunities to steal your card number. And once your card number is in-hand, they’ve got a direct line to your bank account.

If you need to use plastic to pay, consider using your credit card instead. These two types of cards may be nearly the same in your eyes, but when it comes to identity theft, credit cards will usually keep you safer. If you’re still not sure whether to choose debit or credit, here are a few major reasons why credit may be a better choice.

  1. Credit cards lessen the direct and immediate impact – If a criminal steals your debit card and buys $2,000 worth of merchandise, that’s real money taken out of your bank account as soon as the card is swiped. The $2,000 they steal may have been in your account to cover the rent check you just sent out, to buy groceries for your family, or to pay the deposit for your child’s summer camp. Even though the bank will likely refund that money, they may not do it as fast as you need them to, leaving a big hole in your bank account and the possibility of bounced checks, unpaid bills, and various fees. On the flip side, if your credit card is stolen, the money is not taken out of your bank account and should not impact your finances as drastically while you get everything straightened out.
  2. More time to report unauthorized transactions – Both credit and debit card companies have gotten pretty good at spotting fraudulent transactions and alerting you before too much damage can be done. There are, however, certain protections in place for consumers if their cards or accounts are compromised. When it comes to debit cards, the Electronic Fund Transfer Act (EFTC) says consumers aren’t responsible for unauthorized transactions. But, if a thief uses a debit card before a consumer reports it as lost or stolen, liability will depend on how fast it’s reported. For example, if you report the loss within two business days after learning about it, the most you’d be on the hook for is $50. However, if you wait more than two business days, but less than 60 calendar days, that number jumps to $500. After 60 days? You may not get anything back. With credit cards, though, the max liability is $50 — and most companies will waive that.
  3. Scammers are targeting ATMs – Even using your debit card at an ATM to grab some cash can be dangerous. Some criminals are outfitting ATMs with skimmers, which are devices that can record a customer’s personal identification number (PIN). Many skimmers are hard to spot, so victims often have no idea they’ve just given away direct access to their bank account.

Next time you swipe your card at a store, and you’re asked “debit or credit?” think twice before pulling out your debit card. Using your credit card will provide you with more theft protection and greater peace of mind — just make sure you’re paying off your balance every month to avoid accumulating debt.

Want to make sure you always know if fraudulent charges are made on any of your accounts? Learn more about IdentityForce’s credit card monitoring services.

Melanie Medina

Sr. Director of Digital Marketing at IdentityForce
Melanie is a native of Bolivia who has lived in Boston for over 10 years. She likes to make time to travel, jog, read, and play backgammon. Fueled by copious amounts of coffee, Melanie stays on top of her to-do list while also keeping abreast of identity theft issues. Serious data breaches are happening all the time in the U.S. and Melanie loves being part of a solution that brings peace of mind to families across the country.

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