Financial Fable: Which is safer? Debit Cards or Credit Cards?

Credit cards

“….and that’s why credit cards are safer than debit cards. Back to you, Mark,” the TV newscaster smiled.

Katie shook her head and took a bite of her sandwich. News stories like this drove her crazy.

“You don’t agree?” Meg questioned. Meg is Katie’s best friend, and they had decided to meet for lunch before Katie’s client meeting at 1:30 that day.

Katie finished chewing. “I don’t.  The newscaster left out an important detail.”

“Oh, yeah?”

“Yeah.  Debit cards are just as safe as credit cards AND have the same zero liability protection as credit cards IF you run your debit card as a credit card,” Katie answered.

“Really!” Meg sounded surprised. “So, when I hand the cashier my debit card and they ask me ‘debit or credit’, there’s a difference? I usually just tell them that it doesn’t matter.”

Katie nodded while she finished her bite.  She took a sip of her water. “In order for your debit card to be just as safe as your credit card you should always run it as a credit card, which means you’ll sign the receipt rather than entering your PIN.”

Meg smiled. “I use my debit card everywhere now that I’m debt-free.  So I should probably stop letting the cashier decide how much fraud protection I have.”


If you Google “are credit cards safer than debit cards” you will get many results telling you that if your debit card is compromised, you can be liable for the fraudulent charges up to $500 or more (depending on which article you are reading).  But most debit cards are backed by VISA or Mastercard (take a look at your card to see whose logo is on it. Go ahead. I’ll wait).  According to VISA’s debit card policy and Mastercard’s debit card policy, you are 100% covered in the event of fraudulent charges on your debit card.  But, you must run your debit card as a credit card, which means you will sign for the transaction rather than entering your PIN.

If you are working your debt-free plan don’t let misinformation like the newscaster presented lead you back into debt.  If you are just dreaming of a life with no payments but have no idea where to start or how to get there, I can help!

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