Your debit card makes it easy to use your bank account, and debit cards are accepted almost everywhere credit cards are accepted. But if you have the option to use a credit card, it is probably safer to use credit card, especially when shopping online.
How to stay safe using your debit card
To reduce the likelihood of problems, follow these basic security rules.
Look for the lock: Make sure you are shopping on a secure website, especially when it is time to enter your card number. Look for the lock icon in your browser and pay attention to any security warnings that pop up.
Monitor your account: It is always a good idea to keep tabs on your money, and it is especially important if you are sharing account information online. Check your accounts regularly (once per month at a bare minimum—more often is better). And set up alerts in your account so you know when money goes out.
Use secure connections: Mobile devices and free Wi-Fi make it easy to get things done. But you never know how secure a public hotspot is. If you are going to access financial accounts or punch in card numbers, save those tasks for when you are home or work and know your traffic is safe.
Debit card protection
Federal law offers some protection against fraud in your checking account, but you have to report trouble as soon as possible. If you spot the problem and notify your bank immediately, your liability can be limited as follows:
- You are liable if you call your bank within two days of fraudulent use.
- You are responsible if you report the problem within 60 days.
- You can be held 100 per cent responsible if you don’t report the problem within 60 days.
Some debit cards come with additional protection from the card issuer, so you are safer than federal law requires. These services are often called “zero liability” policies or a similar name.
However, your card still pulls from your checking account—so you will have to wait at least a few days to get your money back. If your checking account is running on empty, that is going to cause a domino effect.
If you are using a prepaid debit card (as opposed to one that came with your checking account), you might have less protection—so be sure to research your card’s policies before using it online.
Is online really more dangerous?
Using a debit card online is not the only way to get ripped off. Thieves can steal your card information from brick-and-mortar stores, ATMs, gas pumps, or just about anywhere Wi-Fi is available. Thieves might pull it off with the help of a skimming device or by hacking into a merchant’s payment system remotely.
Despite all the hazards, it has become an online retail world so you should not fear using your debit card number online—shopping is quite safe on secured websites. However, if you have the option, a credit card is better for everyday spending and online purchases.
How to use a debit card In lieu of a credit card online
Enter the number: Provide your debit card number, which is a 16-digit number if you have a Visa, Mastercard, or Discover. You can always enter a debit card number even if the merchant asks for a credit card.
Verify details: In addition to a card number, most merchants require some sort of verification to reduce the chances of fraud. So, enter the security code (usually on the back of your card) and any address information required such as your zip code, which must match the address you file with your bank.
Unlike purchases at a checkout counter, you will not need to provide your PIN. Online purchases will be processed as a “credit” transaction, and funds will be deducted from your checking account within a few business days.
There are a few situations when an actual credit card is required. Some hotel and rental car agencies will only accept a credit card or they will lock up funds in your checking account but debit cards are fine for most transactions. Most online services like iTunes and Netflix will accept either, and they won’t know or care that you are using a debit card.
Debit cards are good tools for keeping your costs low and managing your money. They don’t come with the high monthly fees commonly found on credit cards, and they don’t allow you to rack up debt. However, there are benefits to using credit cards.
When credit cards are better
Just because you can order online with a debit card does not mean you should. Shopping online exposes you to certain risks, especially the risk that your information will be stolen. That risk also exists in brick-and-mortar stores, but it is not as easy for hackers to snatch your data.
Your debit card pulls funds directly from your checking account. If somebody uses your card number to make fraudulent purchases, your account will get drained. That means it will be harder or impossible to pay for your necessary expenses, like rent, mortgage payments, utilities, and food.
If your card information is used fraudulently, you might be protected under federal law, but getting that money back into your bank account is a painful and slow process.
Also, a credit card creates a debt that you have to repay, but it does not pull money out of your checking account without your knowledge. What is more, when your credit card is used fraudulently, your liability is then limited, while debit card fraud can cost a lot more.
