Tis’ the Season for Online Shopping: Why You Should Give Your Debit Card a Break

by Rueben Rodriguez

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Let’s all go and do some on-line shopping!!  The holidays are upon us and wouldn’t you know it, the retailers are trying to entice us by moving up their online sales to match or even precede the traditional Black Friday deals.  You have to admit, it is pretty convenient to be able to replace the hassles of parking and the mobs at the mall with some leisurely browsing from the comfort of your couch. In fact, WorldPay says 44% of us shop on-line between 6PM-12AM and 54% of us are doing so in the living room.  Throw in some nice discounts and top it off with free shipping and you’ve got me clickin’ away!

Whew…all this shopping on my sofa, while I am watching TV, is making me tired. I mean who wouldn’t be exhausted from all of the multi-tab browsing and the zooming and the comparing and the reading of customer reviews AND the entering of personal data with my payment information….  TIME OUT!  Step away from the computer, tablet or “smart” mobile device.

Why you ask? There are people out there who are going to try to commit fraud with your payment details while you are shopping online.  You know; the bad-guys, the cyber criminals and fraudsters.  No you can’t see them, but trust me they are present and doing their best to get at your card information.  Aite Group’s October 2012 report shows that over the past 5 years 42% of people in the US have experienced card fraud (debit, credit, or prepaid).

Understanding this, we need to protect ourselves and ask:  “Which type of card (debit or credit) is ultimately safer to use online”?   Again and again; analysts, government consumer or criminal agencies, as well as former fraudsters say you should only use your credit cards while online.

Do not use your debit card unless you have to.   According to Fraud Avengers, using your debit card carries risks which you might not be aware of.  Did you know when fraudulent activity happens it comes right out of your checking account and your liability for the fraud is $50 if you report it within 2 days and it can jump up to$500 if you report it within 60 days and potentially the entire balance after that? Check out their blog post: Card Fraud: Should I Use My Debit Card?

Not to mention, the money is literally “out of your pocket” until the unauthorized purchase has been investigated and credited.  Also, unless you have money to cover the fraudulent activity your other obligations tied to your checking account will be “bouncing” or not even happen in the case of ACH withdrawals to pay for things like your mortgage, car payment or gym membership.  Really?!

As for credit cards, you are only liable for up to $50 and many card issuers won’t even charge this if something goes awry.  If there is fraudulent activity the money that has been used belongs to the issuer and your checking account balance doesn’t change.  Not to mention you get the added benefits with your credit card such as airline miles, price protection, and various types of insurance for travel or guaranteed returns.  Check out the article “10 credit card perks you didn’t know you had” to learn more.

OK, the time out is over!  Then CREDIT it is and let the online shopping extravaganza resume.  Next question: Where am I going to put all of these boxes?

Rueben Rodriguez is a Principle Product Marketing Manager within RSA’s Identity and Data Protection Group.  He is responsible for the Adaptive Authentication for eCommerce solution which helps protect customers against fraudulent card activity in the on-line world.   Rueben has worked for 20 years within the financial services industry helping financial institutions process, administer, and protect payment information.  Rueben holds a B.S. from California State University Hayward.