Around three-quarters of people in the U.S. purchase something online each year. That number is not expected to decrease any time soon. And while some of those transactions involve digital wallets, for the most part these purchases involve relaying debit or credit card information directly to retailers.
This makes e-commerce an attractive target for data thieves. From phishing attacks to data breaches, there is always someone eager to skim card data and access victims’ money. For maximum protection against fraud, credit cards are safer than debit for online purchasing.
Credit cards generally offer stronger fraud protection than debit cards. Almost all credit cards have zero liability protection, which means you’re not responsible for any fraudulent charges, no matter how your card data was compromised. Debit cards usually have stricter rules on how quickly you must report the loss, as well as whether the card itself is lost or if the data was breached another way. You might end up being responsible for some of the charges. Not the whole amount, but zero liability is preferable to greater-than-zero liability.
Debit cards are also linked directly to a checking account. Most likely this is the same checking account that your paycheck is deposited into, and the same checking account you use to pay bills, buy food and fuel, and live your life. If your debit card information falls into the wrong hands and your checking account gets wiped out, even temporarily, it can be a huge hassle.
A credit card, on the other hand, is not linked to the funds you use for daily life. If credit card information is compromised, you’ve got a buffer between your actual money and the fraud incident, which makes reporting and dealing with the issue much less urgent and stressful.
The issue with using credit cards for online purchases is that you end up paying interest unless you pay the card off every month. However, your best bet is to get a credit card with some sort of cash-back or other rewards program, use this card exclusively for online purchases, and pay the balance off in full every month. It takes financial discipline to not kick the can down the road when the bill comes, but it keeps potential fraud out of your checking account and could benefit you in other way, depending on the rewards offered.
