The Bottom Line. Credit cards are far more likely than debit cards to offer true zero liability protection in the case of fraud, which generally makes them a safer choice. But no matter which payment method you use, there are ways to dodge potential fraud when shopping online, while traveling or in your day-to-day life ...
Using a credit card provides an extra layer of protection against fraud and makes getting a refund easier.
Debit card payment protection
You don't get protection from Section 75 if you buy goods on a debit card – this is because they are not part of a credit agreement. However, you might be able to make a claim for a refund under Chargeback, which we cover in a section below.
Generally, if somebody hacked your account, your bank will refund your money as long as you report it promptly. However, if you wait too long, your liability increases, which means your bank may hold you responsible for some or even all of the lost funds.
Fraudsters can still use your debit card even if they don't have the card itself. They don't even need your PIN—just your card number. If you've used your debit card for an off-line transaction (a transaction without your PIN), your receipt will show your full debit card number.
Contact your bank immediately
Usually, the bank will have a team of investigators who look into it for you. If you claim the use of the card was not authorised by you, it is for your bank to prove otherwise. The bank may be able to cancel the payment or put the money back into your account.
Free spending protection
Debit card payments are covered by the chargeback scheme. If you have a problem with a purchase, like receiving a faulty item or not getting what you've paid for, always ask the company to sort it first. If they won't give you a refund, you can ask your bank to claim the money back.
If you paid with a Visa debit, credit or pre-paid card, a chargeback is an option. If you need to make a chargeback claim, make sure you do it within 120 days of purchase. There's also the Consumer Rights Act that came into effect in 2015, which made consumer rights much easier to understand.
Since credit cards offer fraud liability protections that debit cards do not, meaning online purchases with credit come with fewer risks. So if you're debating debit or credit for online shopping, pick credit for a safer shopping experience.
If you overspend, you could get hit with costly overdraft fees: If charges to your debit card cause your checking account balance to go negative, you could suffer overdraft fees and other steep charges that far exceed the potential costs of using a credit card.
Direct Debit protection - Direct Debit is typically less susceptible to fraud than credit and debit cards. The Direct Debit Guarantee also offers strong consumer protections, making any unauthorised withdrawal refundable.
Credit cards are more secure than debit cards for online use because they offer better fraud protection and make it easier to receive a refund if you fall victim to fraud. According to the Federal Trade Commission (FTC), the most common type of identity theft so far in 2024 has been credit card fraud.
Debit cards come with both benefits and drawbacks. Debit card advantages include flexibility, security, and the ability to use them almost anywhere. Debit cards can help some consumers manage money. Debit card cons include a lack of features, such as cashback rewards and additional protections.
If you're approaching your credit card limit, it's in your best interest to stop spending until you get your balance paid down. Carrying a high balance can dramatically lower your credit score and, if you're looking to take out a loan, it doesn't look great to lenders.
Debit card fraud happens when someone gains unauthorized access to your card information, often through skimming devices at ATMs, phishing scams, or data breaches.
Fortunately, certain credit card purchases are likely to be legally protected under Section 75 of The Consumer Credit Act 1974. What does this mean? It means your credit card provider could be jointly responsible with the retailer or supplier if something goes wrong.
Section 75 means that by law the credit card companies, such as Visa, Mastercard or American Express, have equal responsibility (or liability) with the seller if there's a problem with the things you've bought (in which instance the retailer is deemed to be in breach of contract).
Can you track someone who used your debit card online? While you can't personally track someone who used your debit card online, banks have systems to trace such activities. If you report the fraud, they can investigate the source and potentially work with law enforcement to find the perpetrator.
Debit cards and chargeback
Debit card payments and purchases aren't covered by section 75 of the Consumer Credit Act. But if you don't get something you have paid for by debit card, and the firm is refusing to refund you, you can ask your bank to 'reverse the transaction' and get your money back via chargeback.
Therefore, there's nothing to worry about carrying your bank cards and phone together. Your bank cards will deteriorate over time naturally, whether you keep them with your phone or not.
Call and write your bank or credit union
Tell your bank that you have “revoked authorization” for the company to take automatic payments from your account. You can use this sample letter . Some banks and credit unions may offer you an online form.
You cannot keep money that was mistakenly deposited into your account; it must be returned. Failing to report and return the money could result in legal consequences, such as criminal charges. Contact your bank immediately when you notice the error and keep records of your interactions.