Is It Better To Use A Credit or Debit Card Online?

Is It Better To Use A Credit or Debit Card Online?
Photo by Karolina Kaboompics: https://www.pexels.com/photo/person-using-a-macbook-and-holding-a-credit-card-4968391/

In modern times, credit and debit card transactions have proven to be an easy and convenient method of payment. People no longer need to always carry cash around to purchase items, as with a tap of their card, the payment is made.

Credit and debit cards are the two types of cards used to carry out transactions. These cards are safe and secure to use, so you need not worry about your personal bank information being leaked when you use them in places where cards are accepted for payment. When you use a debit card, the funds are deducted from your bank account, while paying using a credit card results in you borrowing funds from your credit company.

In many situations, it can be better to use one over the other due to their differences in spending limits and fraud protection, despite both credit and debit cards being great alternatives to cash. In this article, we’ll explore this further.

What is a credit card?

Unlike debit cards, credit cards are issued by a credit card company or bank to allow people to make purchases of items using borrowed funds that are expected to be repaid later. Credit cards are issued to cardholders depending on their income and many other factors. These factors help issuers to determine the limit to be placed on the card, which acts as the maximum that can be spent.

Security

Using a credit card to make payments online is more secure because it these companies tend to have protections and encryption methods to fight fraud, which can be especially important when using platforms in industries that are prime targets for cyberattacks –like the games industry. The games industry has seen a massive global boom over the last few years, especially online and iGaming. This has naturally led to a wide variety of platforms and games being created. Determining which are safe can sometimes be tricky, especially when entering your personal & payment information. Using iGaming as an example, we’ll follow two simple steps to help create a strong shield when paying online. 

1. Before signing up to a new site you should check online for trusted reviews (especially any that have public review criteria) and most will give you a breakdown on available payment options and site security.

2. Once you’re happy with your chosen site, it’s time to review how the payments work. In the case of iGaming, you’ll need to check if the site accepts both deposits and withdrawals by credit cards and verify if you’ll incur any fees doing so. Some international websites might also not accept your credit card for making purchases, so always check before you get to the checkout. 

What is a debit card?

A debit card is a payment card that allows you to make purchases using funds directly from your chequing account. This chequing account could be either a personal or business account. When you use a debit card to purchase an item, the funds are immediately withdrawn from your bank account. Debit cards typically offer ATM access for cash withdrawals and the ability to make contactless payments.

Debit cards are issued by banks and can be used at various merchants where debit card payments are accepted, including in-store and online transactions. The funds available in your bank account determine how much you can spend. For instance, if you only have £200 in your account, you can only spend up to that amount. Once the money has been exhausted, you cannot use your card until you deposit more funds into the chequing account.

Security

Debit cards are generally not considered optimal for use online. While they have some fraud and spending protections, they are nowhere near as robust as a credit card, and any malicious activity will have a direct impact on your bank balance. Here are the top two ways you can mitigate any risk to yourself if you do choose to use a debit card online.

1. Always make sure that the website is secure and check that the website uses HTTPS (you’ll find this at the beginning of the website’s URL, in the address bar on your browser).

2. Use a unique password for each site. Try not to use repeating passwords across sites, if one is compromised, all will become vulnerable.

Difference in Fraud Protection

If your debit card is exposed to fraud, all the funds in your account could be wiped out, leading to unwarranted debts. While the card issuer can resolve some issues, debit cards do not provide the same level of protection that credit cards do in this respect.

If your credit card details are stolen, then your card limit may be maxed out. Luckily, once you make a quick report of a fraudulent withdrawal, the card issuer will perform the necessary investigation and will typically remove the charges from your account.

The reason for the difference in fraud protection is that credit card funds are from the card issuer rather than being the card holder’s funds as they are with debit cards. Overall, we can conclude that credit cards offer more security than debit cards.

Debit or credit card: Which is better to use online?

Just like we said earlier, the smart option when making a purchase online is to use a credit card. As we’ve noted earlier, this means using borrowed funds rather than funds that are taken from your account, reducing the chances of fraudulent purchases being made that cannot be reversed.

Even though credit cards are better, not everyone has one and that’s fine. You can still use your debit card to make purchases online, but you may want to limit the money in your account to reduce the impact of any fraudulent activity.

Regardless of whether you use a credit or debit card, as a cardholder, you should also be careful of online websites where you choose to make purchases. Ensure you only use trustworthy websites, clear your bank information immediately after purchasing an item on a shopping site, and keep your cards in a safe place to avoid losing them.

Conclusion

Both debit and credit cards have their pros and cons, but credit cards are the better option as they provide improved fraud prevention. Monitor your accounts. If you notice any fraudulent activity, quickly report it to the card issuer so the necessary steps can be taken.