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Don’t get spooked! Here’s when it’s safe to shop online with a debit card

It’s “only October” but you know you’re already neck-deep in holiday prepping and shopping. It starts with that funky Halloween costume you’re convincing yourself is definitely worth $80, and it doesn’t quite end until January. 

As we get looser with the online and offline purchases around this time of year, scammers also start to hover in greater numbers like mosquitoes after a summer rain. 

Many people feel most secure using either cash or a credit card for holiday purchases. Both make sense, for different reasons.  

  • Cash transactions are straightforward, with zero risk of being ripped off by “skimmers,” devices added on top of card readers that steal your personal data. You can’t get swindled out of your cash through phishing emails or other online scamming tactics. 

  • A credit card has a different set of risks and benefits: if you lose your cash you’re out of luck, but if your card gets swiped you call your bank and get a new one. But your credit card account is far more susceptible to skimming and online scams. 

What about debit cards vs. credit cards? It might not be your first instinct to rack up holiday expenses on your checking account, but debit cards are secure and have some safety and strategic benefits over both cash and credit. 

Here are five reasons why you should choose your debit card over credit or cash for secure holiday shopping.

 

Cash is always a liability.

Thieves thrive on holiday shopping. If you lose your wallet, or fall prey to a pickpocket, you’ll probably never see that cash again. But one call to your bank will protect the funds in the checking account tied to your debit card. The physical card itself is cancelled and can be replaced swiftly and remotely, while your cash sits tight in the bank.

 

Plastic is a lot more forgiving.

While a debit or credit card is more secure in this sense, you should still move quickly as soon as you realize your card is gone. According to Federal Trade Commission (FTC) guidelines, if you report the loss or theft of your debit card before any unauthorized charges are made, you pay nothing, and if you report it within two business days, you’re on the hook for $50 max. Way less scary than the prospect of losing your entire billfold in one swoop. 

Consult the FTC chart for a full breakdown of your liability with a lost or stolen debit card.

 

Multi-factor security is always safer.

Debit cards have changed a lot over the years. (Remember: they used to be checks!) These days it’s common for your debit card to have a small, copper-colored chip at the bottom. That’s called an EMV chip, and you want it there, because it makes it way harder to skim at popular targets like gas station pumps and third-party ATMs. Much like the magnetic stripe on the back of your card, the chip contains information about your account, and adds a layer of security to every transaction.

You may be thinking at this point: this all makes sense, but my credit card does the same thing. You’re not wrong. There's little difference between using a debit card and a credit card for most online transactions, and your credit card probably has an EMV chip for in-the-world purchases. 

But your debit card comes with an added layer of security that you probably take for granted: your trusty 4-6 digit PIN. 

The personal identification number is an ancient technology (in debit card terms) for which there is no substitute. Where a credit card is swipe-and-go, a PIN lives in your brain and requires your fingers touching real-world buttons. This additional verification step adds a layer of security to IRL purchases that credit cards lack in most scenarios.

 

A debit card makes it harder to overspend. 

Let’s be real – the prospect of a second pandemic holiday season makes people do crazy things. We’ve all gotten used to being a little more breezy with online shopping, our comfort levels with doing “normal” things has ebbed and flowed in unpredictable ways, and all this flux sometimes causes a brain fog that we’re tempted to blow away with retail therapy. Here’s where we see a true hero emerge in the debit vs. credit card debate. 

A debit card is tied to your checking account, which has a hard limit of money you can spend. Some debit cards come with a daily spending limit set by the issuing bank or credit union, as an extra layer of control. 

If you’re struggling to break out of the overspending cycle — which only gets deeper as the nights get longer — you should proactively choose to do the bulk of your holiday shopping with your debit card, starting with that Halloween costume. Not only is it as secure as a credit card, but you’re far more likely to spend within your means when using debit, instead of racking up debt and paying interest on a credit card.

 

Cool rewards!

You probably already associate credit cards with rewards, but did you know that choosing the right checking account can net you some sweet deals you might be missing out on now? 

Thanks to community banks and credit unions who offer reward checking accounts and savings accounts, there are many great benefits to be had from using your debit card: much higher-than-average interest, cash back, and tools to help you save smarter, to name a few. Kasasa® works with local banks nationwide to offer these services — check out our Kasasa Cash® and Cash Back offerings to learn more!

 

Basic security rules when shopping online with a debit card.

Now you know why loading your holiday shopping onto a debit card is a good, safe idea. Here are a few closing notes to keep in mind as you start to bulk buy Halloween candy: 

Shop secure. Make sure you’re shopping on a secure website, especially when it’s time to enter your card number. Look for the locked padlock icon in your browser and pay attention to any security warnings that pop up. 

Keep tabs on your account. It’s always a good idea to monitor your money, especially if you're sharing account information online. Check your accounts regularly. Once a month should be the bare minimum, but more is better. If you notice anything off, report those discrepancies to your card issuer immediately. 

Pro tip: Many accounts allow you to program transaction alerts. Take advantage of these when possible.  

Shop from home. This one’s probably pretty obvious — many of us are still in a state of disorganized semi-lockdown and avoid going out when possible. But pandemic or not, you should always make online purchases from the security of your home wifi. Public hotspots aren't the most secure. If you're itching to make an online purchase on the go, hit pause and wait until you're back home. Your account will thank you. 

Never, never, never provide your debit card information in an email. Or snail mail. No company worth doing business with will ever request your debit card information via email, but scammers often do. Especially during this 🎃🦃🔔 season. Don't carry your PIN in your wallet, purse, or pocket. Don’t write it on your card, a deposit slip, envelope, or any other piece of paper that could be lost or looked at. Lock it up in your head! 

Only use ATMs you can trust. Like the ones you find at a bank or credit union. The ATM at your nearest chain grocery or subway station are publicly vulnerable to skimmers.

Tags: Personal Finance, Debit Card