women thinking and biting on credit card

Are credit cards or debit cards safer online?

Whether using a debit card or credit card there are two laws in place to protect you. Debit card transactions are protected by the Electronic Funds Transfer Act (EFTA) and credit cards are protected by the Fair Credit Billing Act (FCBA).

According to the EFTA (debit cards) you have 60 days to report a lost or stolen card. If the card is not physically lost or stolen you have 60 days to report fraudulent transactions with zero liability.

With the FCBA (credit cards) your maximum liability for fraudulent activity is only ever $50 but most credit card companies promise zero liability for all fraudulent transactions.

As you can see both types of cards have laws in place to protect you.

So, which is better?

The biggest difference is when your card is compromised whose money is the fraudster actually getting? When fraudulent transactions happen on your credit card you are not out your OWN money, just available credit. You report the transactions and get the credit back. It never affects your personal bank account.

However, when your debit card is compromised your bank account balance is directly affected. Often times when this happens you can see a domino effect because the money you believed to be in your account is no longer there. You can see fees from returned bills, declined transactions, and more. While you are protected, and the funds will be put back you have a potential mess on your hands.