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Reasons Why Credit Cards Are Safer Than Debit Cards

Tuesday, December 7, 2010 - 3:14 PM
Kathy Kristof in her Devil in the Details blog has a good review of 5 reasons why debit cards are more dangerous than credit cards. Those who have been following this issue are probably aware of these reasons. With credit cards you don't have the issues of account holds and overdrafts. Also, the credit card is better when there's either a dispute with a merchant or a fraudulent charge.
Ken TuminKen Tumin5,471 posts since
Nov 29, 2009
Rep Points: 125,632
1. Tuesday, December 7, 2010 - 3:59 PM
I often said I would never use debit cards but in this dismal economic environment, using them to satisfy reward checking account requirements is a good way to earn a higher interest rate on savings.   

I always carry one debit card and one credit card and use simple criteria to decide which to use for a given purchase.

Debit cards I use only in places where the card reader is widely visible in order to minimize the chance that it might have been tampered with.  I swipe the card myself – and always pay as a credit transaction.  I do not use my debit cards at gas stations nor at hotels, because of holds, as cited in the article.   Also, since card reader at self-service stations are vulnerable to tampering, because the pumps are physically distant from the people who work there, that is another reason why I avoid using debit cards there.    

Credit cards I use for anything which might be returned (in case of dispute with a merchant), or on a purchase where I might want the extended warranty benefit which my credit card offers, or in a setting where the card is out of my sight, such as when I hand it to a server to pay for a meal.  Naturally, any online purchase is done through my credit card, and I use ShopSafe in that case to generate a restricted-use credit card number with a limited credit amount in case of processing errors at the vendor site.    

I monitor my reward checking and credit card accounts daily to improve the chances of detecting a fraudulent charge promptly.   All practices considered together, it’s not a perfect system but it works for me.
pearlbrownpearlbrown1,469 posts since
Nov 2, 2010
Rep Points: 6,378
2. Wednesday, January 19, 2011 - 9:23 AM
Yes, I believe credit cards are better than debit as well primarily because you can build up a good credit score with a credit card and leverage a good credit standing for high expense purchases in the future. A debit card is basically like carrying around cash with hidden fees if you overdraft. There are no rewards programs with debit cards so you can't accumulate points and get gifted for everday expenses. Also with debit cards there's slightly weaker fraud protection than with credit cards.


Josh Webber
SalvintiSalvinti3 posts since
Jan 14, 2011
Rep Points: 6
3. Saturday, February 11, 2012 - 3:58 AM
I actually disagree. Credit cards are more dangerous because if someone else aquires your CC#, they can basically charge away until they hit your credit limit. With a debit card, it's tied directly to your bank account. Keep your bank account at a level where it's limited to what you really need - this is damage control. If you have a great bank that lets you have account notices when your balance goes above or below a set limit, you basically find out instantly if someone has used your debit card # in an unauthorized fashion.

On the other hand, you could have someone maxing out your credit limit and the only way you'd find out is when your credit card is declined or you receive your next monthly payment. If your like most Americans, you'd just ignore the bill and pay the minimum balance anyway.

Further, credit cards tend to make people get to the "I have credit, I can buy whatever" mindset, and that's what caused our economy to tank a few years ago. People used home loans to pay off their credit cards not understanding that using debt to pay off debt just means you are now in more debt.

I do have a credit card - but I only use it to buy gas. I pay it off in full each month (NOT the minimum payment) - just for building my score purposes.
An0nym0usAn0nym0us1 posts since
Feb 11, 2012
Rep Points: 1