Public perceptions can shift wildly when it comes to paying for everyday items. There’s a growing reliance on debit cards and credit cards, and the attitudes towards using plastic can vary depending on a consumer’s age, educational level and whether or not they have children.
Only two years ago, a survey of over 2,000 U.S. consumers showed that 57 percent of them “never” carry cash, and instead rely on debit or credit cards for purchases of any size. For consumers between the ages of 18 and 29, the number is even higher, with 64 percent responding that they rely solely on plastic.
Obviously, paying with a card is convenient, but there’s also a perception that plastic is more secure. After all, if your wallet is stolen, your cash can’t be recovered. A credit card, however, can be cancelled, and unauthorized charges can be removed.
But how safe are debit cards and credit cards really? October is National Cybersecurity Awareness month, and it’s the perfect time to examine your relationship with your payment cards and take steps to secure them.
- Debit v.s Credit: What’s the Difference? Most card-carrying consumers understand that a debit card draws funds out of your existing bank account, while a credit card amounts to a promise to pay at a later time. For that reason, some people choose to use a debit card for most of their plastic purchases since they feel less likely to overspend.
- Chip vs Swipe: What’s the Difference? The magnetic stripe on the back of your credit card contains all of your account information, and is more of a target than just your account number. That’s why an unfortunate number of victims have been alerted to fraud on their accounts in circumstances in which a physical copy of the card was used.
- So What You Should Do? With so many different payment options—debit cards, credit cards, magnetic stripes, chip and PIN, even smartphone apps that pay for you—it may not seem like any one option is the most secure or comes with the most protection. One of the best behaviors you can utilize to protect yourself is vigilant monitoring of your accounts and your credit reports.
Unfortunately, the differences in those two card types go far deeper, and even carry legal distinctions for fraud liability. If your debit card is hacked, you can be responsible for more charges than if a credit card is hacked, for example. That’s why some industry experts recommend using a credit card for online purchases instead of a debit card, or maintaining a very low balance in the account that feeds the debit card.
But is it really a debit card or is it a credit card? This can be confusing from a personal security and liability standpoint, so here’s the answer to the debit card dilemma: If your debit card from your bank has a Visa or Mastercard logo on it, then it is protected just like a credit card from fraudulent charges and can even trigger alerts if there’s a reason to suspect fraud.
How did the thief get the physical card when it’s still tucked in your wallet? By creating a fake copy of your card. Hotel check-in desks are a common culprit, since they have the machine to make magnetic stripe room keys and can copy your card onto a key blank. There have been reported cases where cards were copied in restaurants, too, since the serving staff may leave with your card to process your payment.
The new chip cards that are still in the process of rolling out are thought to be more secure, since your card can’t be copied as easily. There were some initial concerns over the potential for RFID skimming, in which a hacker can read your chip credit card remotely due to the radio frequency, but so far no thief has been reported using this method. Of course, large-scale hacking to steal millions of credit cards is far more productive than skimming cards one person at a time.
Don’t wait for your bank to contact you with suspicions of fraud. Check your accounts from a secure computer regularly in order to be on the lookout for strange activity. Likewise, request free copies of your credit report each year—you can even stagger the requests to get one report every few months—and look them over carefully for fraud.