Credit vs Debit – Which is a Better Option for Online Use?

Credit vs Debit – Which is a Better Option for Online Use?

Use of credit card is more common in times of online purchase. In fact, it is often perceived as the safer option if compared to debit card. That is not to say risk of frauds is nil if you are using credit cards but there are added layers of protection that make credit card a smarter and safer choice than debit card during online purchase.

Zero-fraud liability for most credit cards

If you are using credit card, it will be easier to get a refund more easily. The Federal government has extended certain protections during transactions via both debit and credit cards; however, most of the credit cards have taken the extra protection to another level by integrating zero-fraud liability.

If anyone can get to know your credit card number and use it to buy something online, there is a strong chance that you will not be held liable for the transaction, provided the incident is reported in time. Unfortunately, it is not the case if the same fraud happens involving your debit card.

Enhanced federal protection on purchase with credit cards

As per the Fair Credit Billing Act, there is an added protection on purchase with credit cards. The act has restricted liability for unauthorized charges involving a credit card to $50, no matter if it is traditional or online credit transaction, provided the incident is reported within 60 days.

It has already been mentioned that most of the credit cards are associated with zero-fraud liability implying that you won’t be forced to pay even a single penny in fraud cases. Most of the credit card issuers will launch an enquiry into the matter and during the process; fraudulent charge will be put on hold.

On the other hand, there are no such stringent rules observed if debit cards are involved into transactions. If debit cards are used for purchase, money is deducted from your bank account, you need to wait for days or weeks for refund in the event of any fraudulent transaction involving your debit card. The unfortunate part is your liability will rise up to $500 if fraudulent transaction cannot be traced within two business days. The worst part is yet to come. Your bank account could be drained without any chance of recourse after that. It’s the rules by the Federal Trade Commission. If you fail to report any fraudulent transaction in 60 days after a statement is sent from your end, you are likely to be booked for all money shifted from your ATM debit card account and even more.

It is easier to dispute charges if transaction is done by using credit card

Use of credit card for online buy makes a more sensible decision for another reason – it disputes resolution. It may happen that you find a product damaged after delivery or even it does not reach your doorstep at all. Many have suffered such problem. You may even get what you have not ordered at all.

If transaction is made via credit card, the payment can be withheld or a charge could be disputed in case, there is any issue with your purchase. The credit card issuer will look into the investigation details in most of the cases. If you find the delivered item is damaged or you don’t get what you ordered, you just need to call them.

It is less likely to be so much smooth if purchase is made with debit card. If debit card is used for transaction, the funds are taken away from your bank account immediately. You are left with no cash until the dispute is settled with the online dealer. If the bank agrees to look into the matter, It’s your responsibility to present the proofs.

Responsible use of credit cards will help you build credit score

Debit cards are linked to your bank account and allow you to spend your own money. On the contrary, you get a short-time loan while using your credit card and so are obliged to pay the amount back. The word ‘loan’ associated with credit card may scare you. However, on in-depth inspection, you will realize that it actually gives you a chance to improve your credit score. Make a habit of clearing payment immediately after buying; such a responsible credit practice actually gives a boost to your credit score over time.

Debit card does not contribute to improvement on your credit score.

Some tips for credit card users:

  • Pay balances in full while closing statement every time to avoid incurring interest charges.
  • Be extremely cautious while using credit card. Start with making small purchase at first so that payment can be cleared quickly.
  • Shop on the e-commerce sites that integrate added security features. Most secured sites start with “https”
  • Don’t use the e-commerce sites that look unprofessional.
  • Maintain privacy regarding your credit card details Never reveal more than what is required.
  • Monitor your account daily.


Credit cards have innumerable advantages over the debit cards. They come up with protection even from the government. Added layer of security is what matters most to us.

Do you agree to my thoughts on credit card use? Feel free to leave your comments. Please don’t make it a one-word response and offer explanation for your answer.

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