Americans feel safer using debit, but that’s not always the case

Inside Subprime: September 19, 2017

By Caroline Thompson

According to a recent national survey, 66 percent of Americans think that using a debit card for purchases is a safer alternative to using a credit card. Unfortunately for U.S. consumers, the facts don’t actually support this conclusion.

The idea itself makes sense: if you use a credit card, you’re not actually spending that money right away. It can be a little too easy to rack up a sizable bill  – plus interest – that will take you months or even years to pay back. People who use debit cards for most transactions are acutely aware of this fact, and may prefer to see their bank balance go down with every purchase, forcing themselves to spend only as much as they have in their account, and keeping out of debt.

In the wake of one of the biggest security hacks in modern history, Americans need to be more cautious than ever about the threat of identity theft. The truth is, most debit cards do not offer anywhere near the kind of protection from fraud that credit cards do.

The vast majority of credit cards offer $0 fraud liability, which means if your card is stolen or your number is leaked online, you won’t be on the hook for even a dime when a thief uses your card to charge $900 at a Walmart across the country.

But debit cards rarely offer this kind of protection. In fact, if your debit card is stolen and used without your knowledge, you could be forced to pay for a fraudster’s shopping spree, said Robert Siciliano, an identity theft expert and the CEO of

“If someone gets ahold of your debit card information, the second they use it, depending on the nature of the transaction, your bank account will be drained,” said Siciliano. “In some cases, you can kiss that money goodbye; you got scorched. More than ever, crooks are using others’ debit card data and sucking dry their bank accounts via ATMs — in an instant.”

According to the Federal Trade Commission, your net loss from a debt card theft will usually depend on how soon you report your card lost or stolen. “If you report an ATM or debit card missing before someone uses it, the Electronic Fund Transfer Act says you are not responsible for any unauthorized transactions. If someone uses your ATM or debit card before you report it lost or stolen, your liability depends on how quickly you report it.”

This chart from the FTC shows just how much you could lose if you wait to report your card missing:


Using a credit card gives you an extra level of protection from identity thieves, and can help boost your credit if you do it responsibly. The best, safest way to spend money is to use a cash back credit card for all your everyday purchases, and pay it off every month to avoid having to pay interest. If you’re still wary about using credit, the FTC recommends these tips for debit card users:

Don’t disclose your account number over the phone unless you initiate the call.

Guard your account information. Never leave it out in the open or write it on an envelope.

Keep a record of your account numbers, expiration dates, and the telephone numbers of each card issuer so you can report a loss quickly.

Draw a line through blank spaces on charge or debit slips above the total so the amount can’t be changed.

Don’t sign a blank charge or debit slip.

Tear up copies and save your receipts to check against your monthly statements.

Cut up old cards — cutting through the account number — before you throw them away.

Open your monthly statements promptly and compare them to your receipts. Report mistakes or discrepancies as soon as possible.

Carry only the cards you’ll need.

Don’t carry your PIN inyour wallet, purse, or pocket — or write it on your ATM or debit card. Commit it to memory.

Never write your PIN on the outside of a deposit slip, an envelope, or other papers that could be lost or looked at.

Carefully check your ATM or debit card transactions; the funds for this item will be quickly transferred out of your checking or other deposit account.

Periodically check your account activity, especially if you bank online. Compare the current balance and transactions on your statement to those you’ve recorded. Report any discrepancies to your card issuer immediately.

For more information about credit cards, credit and staying safe from identify theft, check out these related articles:

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