By Steve Tcherchian, CISSP, PCI-ISA
As we near the holiday season, thieves are hard at work with new and clever tactics designed to exploit innocent shoppers and take advantage of them. A simple way to protect yourself from becoming a victim is to stop using your debit card for purchases. Whether shopping online or in a brick-and-mortar store, using a debit card exposes you to unnecessary risks and may open a world of worry.
Use credit cards instead. Credit cards provide better protection and financial flexibility. Making this change could be one of the smartest financial decisions you make, not only for the holiday season but for the long run.
1. Immediate Access to Your Money—A Double-Edged Sword
Debit cards take money directly from your bank account as soon as a transaction is approved. Although this seems convenient, it also means that in cases of fraud your money disappears fast. Recovering those funds can take days or weeks, leaving you exposed, especially if you have automatic payments or other immediate financial responsibilities connected to that account.
Credit cards, on the other hand, offer a safety net. If a fraudulent transaction is made, you can dispute it, and the credit card company will generally resolve the issue without having you pay anything. Your bank account stays unaffected until the issue is resolved, eliminating unnecessary stress and protecting your financial security.
2. Using Debit Cards Won’t Build Your Credit
Many people fear credit cards since they associate them with debt buildup. On the other hand, credit cards are a terrific tool for building your credit score and providing financial flexibility when used responsibly. Debit cards do not add to your credit history, so you lose the chance to show good financial habits and responsible spending and repayment.
Using credit cards regularly and responsibly will improve your credit score, saving you money on loans and mortgages and giving you access to more favorable financial options in the future. Credit cards should be a key part of your long-term financial strategy. Debit cards do not provide these benefits.
3. Loss Protection and Warranties
Credit cards often come with additional perks, such as extended warranties and purchase protection. If you use your credit card to buy a big-ticket item like a laptop or smartphone, you may get extra warranty coverage and even theft protection. Debit cards do not usually provide these benefits—it is essentially like paying with cash.
When you use a debit card for large purchases, you’re missing out on these valuable free benefits that save you money and hassle down the road.
4. Holds on Your Money
If you’ve ever rented a car or checked into a hotel, you’re probably familiar with the “hold” they place on your card for incidentals. With a credit card, these holds are simply blocked off from your available credit. But with a debit card, that hold is placed on your actual money, preventing you from accessing your funds. Worse yet, you don’t have control over when the hold is released, leaving you at the company’s mercy to give you back your cash.
This can be problematic if you need access to that money for other expenses or emergencies while the hold is in place.
Credit Cards Aren’t the Enemy
While credit cards have a reputation for leading people into debt, the reality is much different if you use them wisely. They come with protection against fraud, help build your credit score and come with perks like purchase protections and rewards. On the other hand, debit cards appear easier to use but come with more risk and fewer rewards.
This holiday season and in the future, protect yourself by switching from debit to credit cards for your purchases. It is a minor change that can significantly impact your financial security and overall peace of mind. Stay safe, shop smart, and make the most of the tools available to you.
About the Author
Steve Tcherchian is CISO of XYPRO.com and a visionary cybersecurity executive with over 20 years of experience in the industry. As a passionate advocate for cybersecurity, Steve is dedicated to demystifying the complexities of the industry, sharing invaluable insights and experiences across global stages as a sought-after speaker at events and conferences. His contributions extend beyond the podium; as a former ISSA CISO Advisory Council member, the X9 Security Standards Committee, a serving member of the Forbes Tech Council, and a patent holder, he has influenced pivotal cybersecurity standards and innovations.