Credit Cards vs. Debit Cards: Which One is Safer Against Fraud?


Fraud is a serious threat to consumers who use plastic cards for online or offline purchases. According to the Federal Trade Commission, consumers reported losing more than $3.3 billion to fraud in 2020, up from $1.8 billion in 2019. One of the most common types of fraud is unauthorized charges on credit or debit cards, which can happen when hackers steal card information, or when cards are lost or stolen.

But not all cards are created equal when it comes to fraud protection. Credit cards can be a safer option, because they provide better protection against fraud. If your debit card or debit card information falls into the wrong hands, a criminal has direct access to all of the money in your checking account2. However, if your credit card is compromised, it will not be linked to your bank account, and you can report the fraud to the credit card issuer to obtain a credit on your statement1.

PLEASE NOTE: USE OF DEBIT CARDS: If you are using debit cards (which SOL does not advocate), it remains your responsibility to closely monitor your account statements on an ongoing and continuous basis to detect (and immediately report) potential fraudulent transactions.

To help explain the differences between using credit cards versus debit cards, we sat down with Sergio Contijoch, SOL client relationship manager, for his thoughts.

The Differences Between Credit and Debit Cards

Credit cards and debit cards are both convenient ways to pay for goods and services, but they work differently. A credit card is a form of borrowing money from a bank or a card issuer. When you use a credit card, you are using the issuer’s money to pay for your purchase, and you have to pay it back later, in some cases with interest. Conversely, a debit card is a form of spending money from your own bank account. When you use a debit card, you are using your own money to pay for your purchase, and the amount is deducted from your account immediately.

Because of these differences, credit cards and debit cards have different laws and regulations that govern their use and protect consumers from fraud. For credit cards, the primary law is the Fair Credit Billing Act (FCBA), which limits your liability for unauthorized charges to $501. For debit cards, the primary law is the Electronic Funds Transfer Act (EFTA), which limits your liability for unauthorized charges depending on how quickly you report them1.

The Benefits of Credit Cards

Credit cards offer several advantages over debit cards when it comes to fraud protection. Here are some of them:

The Drawbacks of Credit Cards

Credit cards are not without their drawbacks, however. Here are some of them:

How to Protect Yourself From Fraud

Whether you use a credit card or a debit card, you should take some precautions to protect yourself from fraud. Here are some tips:

  • Monitor your accounts: Check your statements regularly and look for any suspicious or unauthorized charges. Report them to your card issuer or bank as soon as possible. You can also sign up for alerts or notifications that inform you of any transactions or changes in your account1.
  • Use secure websites: When shopping online, make sure the website is secure and trustworthy. Look for a padlock icon and “https” in the address bar, which indicate that the website encrypts your information. Avoid clicking on links or attachments in emails or messages that claim to be from your card issuer or bank, as they may be phishing attempts to steal your information1.
  • Protect your information: Do not share your card number, PIN, security code, or password with anyone, unless you initiate the contact and trust the recipient. Do not write down or store your information in an insecure place, such as a piece of paper or a computer file. Use strong and unique passwords for your online accounts and change them regularly1.
  • Be careful with your card: Do not let anyone else use your card or see your information when you make a purchase. Use chip-enabled terminals or contactless payments when possible, as they are more secure than magnetic stripe readers. Cover the keypad when entering your PIN at an ATM or a point-of-sale terminal. Keep your card in a safe place and report it lost or stolen immediately1.


Credit cards offer better protection against fraud, as they limit your liability, allow you to dispute charges, and are not directly linked to your bank account. Debit cards offer less protection against fraud, as they expose your money to theft, and are harder to reverse transactions or get your money back.

However, the best choice depends on your personal preferences and financial situation. You should also take some precautions to protect yourself from fraud, regardless of which type of card you use.

I hope this article helps you understand the risks of using credit cards versus debit cards. If you have any questions or feedback, please let me know.

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