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You are here: Home / Blog Entries / Is your credit card safer?

Is your credit card safer?

By Steve Stewart on December 1, 2009

Is your credit card safer?

The common opinion about credit cards is that they are safer than a debit card.   But a debit card is just as safe when used in the credit function (not using the PIN number), as stated on Visa’s own website:  http://usa.visa.com/personal/using_visa/personal_finance/debit.html

Benefits of a Visa Debit card:

* Convenience – The Visa Debit card frees cardholders from having to carry bulky checkbooks, multiple identification cards and large amounts of cash.
* Security – Visa offers debit cardholders Zero Liability in cases of card fraud, theft or unauthorized card purchases for signature-based transactions, provided cardholders promptly notify their issuer of such fraud, theft, or unauthorized purchase.

I have been living without a credit card for a number of years.  There are so many other benefits that Visa does not post on their site about debit cards:

  • The lowest interest rate in town!  The interest rate on my debit card is the lowest you can get – ZERO PERCENT!
  • I spend less: Dunn and Bradstreet did a study reporting that on average you will spend 12-18% more when making a purchase with a credit card as opposed to cash.  While a debit card is still a swipe instead of spending cash I find that I make different, smarter choices when making purchases.
  • No annual fee or account fees.
  • No “gotcha fees”.  There are no late payment fees, over the limit fees (although there would be an overdraft on a debit card, see next point).
  • No pay-off or pre-pay fees for paying the balance in full (keep an eye out for many credit card companies to charge a fee for this soon).
  • More attention to spending: I’m spending my own money and I can’t spend what I don’t have in the account.  This creates a healthy habit of paying attention to my accounts, upcoming expenses, and my credit bureau – which I should be doing ANYWAY.
  • No difference with retailers: If you run your debit card through the machine like a credit card then the transaction is handled exactly like a credit card – same processes and protections apply.

If my debit card is stolen:

…then I would have to change my account, but my bank will handle that for me.  Otherwise they will not get my business and I will find one that does – and right now BANKS REALLY WANT MY BUSINESS.  Credit card companies want my business, but only to the extent that I pay them interest or fees.

So which is safer?  Given the benefits of paying attention to my spending and financial accounts, I vote for the debit card over the possibility of over-charging, over-spending, and miss-management of the Credit Card.

 

About Steve Stewart

Hello. My name is Steve Stewart and I HATE YOUR DEBT MORE THAN YOU. I believe everyone should be rich so they can help others in times of need. Life is too short to be this broke! Let's work together on designing a plan for your house of financial freedom. Don't be afraid to reach out to me - I'm here to help answer your call for help (S.O.S.) with a MoneyPlan.

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Trackbacks

  1. Dave Reads: Credit Card companies charge you « says:
    December 1, 2009 at 7:33 am

    […] Also check out this post on the benefits and similarities of Debit Cards: http://moneyplansos.wordpress.com/2009/12/01/is-your-credit-card-safer/ […]

  2. 022 MPSOS – Living Without Credit Cards Pt4 | MoneyPlanSOS.com says:
    June 28, 2011 at 10:46 am

    […] Here is a blogpost I wrote about Visa’s Zero Liability policy and the protection they give to debit cards: http://www.moneyplansos.com/is-your-credit-card-safer/ […]

  3. Living Without Credit Cards Pt4 – MPSOS022 says:
    December 28, 2014 at 12:01 pm

    […] Here is a blogpost I wrote about Visa’s Zero Liability policy and the protection they give to debit cards: http://www.moneyplansos.com/is-your-credit-card-safer/ […]

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