If you’ve recently opened a checking account, you may have received a free debit card to use with it. Debit cards make it easy to use your checking account and are accepted almost everywhere credit cards are accepted.
However, if you do have a credit card handy with you, it may be safer to use your credit card. This is especially true when you’re shopping online as it can protect you in a few ways that a debit card can’t.
Here are some tips to using your debit card online and perhaps a better alternative.
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How to Use a Debit Card Online
- Enter the debit card number. Your debit card number is a 16-digit number if you have a Visa, Mastercard, or Discover. You’ll be able to enter a debit card number even if the merchant asks for a credit card.
- Verify your details. To protect you from fraud, most merchants require some sort of verification in addition to your card number. Be sure you enter the security code, usually located on the back of your card, and any address information that may be required, like your zip code, which must match the address on file with your bank.
When you’re making an online purchase, you will not need to enter your PIN like you do at most physical stores. Your online purchases will be processed as a credit transaction, and your funds will be deducted from your checking account within a few business days.
However, you can’t use your debit card in place of a credit card for every transaction. There are some situations where you must use a credit card. For instance, some hotel and rental car agencies will only accept a credit card or they’ll place a hold in your checking account. But, debit cards are fine for most transactions and services, such as Netflix or Spotify.
Debit cards are handy for keeping your costs low and managing your money. They usually come for free with your checking account if you apply for one. You won’t be able to rack up debt when using them since they take the funds out of your checking account within a few days, while you have to make sure you pay off your credit each month with a credit card. In addition, they don’t come with the high monthly fees that are commonly found on credit cards.
Why Credit Cards Are Usually Better
Although you can shop on the web with a debit card, this doesn’t mean that you should. When you’re shopping online, you’re exposed to certain risks, especially the risk of having your information stolen. If you’re shopping in-store, of course you also run into the risk of having your data stolen, but it’s not as easy for hackers to steal it.
Your debit card takes funds directly from your checking account. If someone uses your card number to conduct fraudulent purchases, that money is automatically taken from your account.
Thus, if you don’t have a huge sum allotted in your account, it makes it harder to pay for your necessary expenses, such as rent, mortgage, and utilities. If your card information is used fraudulently, you may be protected under federal law, but you are not guaranteed and getting your money back into your bank account is a hassle.
A credit card creates debt that you have to repay, but it doesn’t take money out of your checking account unless you skim over your credit card statement and blindly pay for your purchases. In addition, when your credit card is used fraudulently, your liability is limited to $50, while debit card fraud can cost a lot more.
Credit cards may also come with incentives for cardholders to use their cards more often and for banks to maximize their revenue. For example, you may get some cash back or points to redeem for a reward. Some even have a welcome offer so you can get even more cash back or points when you spend a certain amount with the card within an allotted time.
If you’re interested in applying for a credit card, take a look at all the credit card options below:
How to Stay Safe When Using Your Debit Card
- Shop secure. Make sure the website URL displays “https” or look for the lock icon in your browser when you’re shopping online, especially when it’s time for you to enter your card number. Also pay attention to any security warnings that pop up.
- Monitor your account. Check your bank account often to see if there are any irregularities occurring without your authorization. This is especially important if you’re sharing your account information online. Many checking accounts allow you to set up free alerts in your account so you’re notified when money goes out. Take advantage of it.
- Use secure connections. Free public Wi-Fi is almost everywhere nowadays, and it’s easy to access. But is it really safe to connect your mobile device to it? Data is accessible to anybody in range, meaning that your information could be at risk. It’s especially risky if you’re using public Wi-Fi for online banking. If you’re going to access financial information or inputting your credit card numbers, save those tasks for when you’re in a place where you know your information is safe, like home or at work.
Debit Card Protection
If you have fraudulent charges in your account or lose your debit card, federal law offers some protection. However, you have to report it to your bank as soon as possible. Your liability may be limited.
You’re liable for up to $50 if you call your bank within two days of fraudulent use, and you’re responsible for up to $500 if you report the issue within 60 days. However, if you don’t report the issue within 60 days, you can be held up to 100% responsible.
Depending on your card issuer, some debit cards come with additional protection, so you may be safer than the federal requires. They’re usually called “zero liability” services or something similar.
However, your card still draws from your checking account, so you’ll have to wait at least a few days to get your money back. If your checking account doesn’t have a sufficient amount in it, you won’t have a good time. Note that prepaid debit cards may come with less protection, so make sure you research your card’s policies before you use it to make online purchases.
Although using a debit card online can be dangerous, there are many other ways and you could get your information stolen. For example, just shopping in-store, at ATMs, using your card at the gas pump, or almost anywhere Wi-Fi is available. Thieves can use a card skimmer or hack into a merchant’s payment system.
Nonetheless, online retail shopping is growing, so you should be secured on many websites. If you’re still wary, make sure you protect yourself with the information above. And if you do have an option, a credit card is better for everyday spending and protecting your money.
You can find our best credit card bonuses and apply for a card that best suits your needs. And if you’re interested in checking out what checking account bonuses or saving account bonuses are available, feel free to browse our site.