Debit card security is better than it used to be, and new mobile payment options that you use your cell phone can also help with security. Still, there are times when a credit card is a more secure way to make a purchase.
First things first
Credit card problems come in two different forms:
- Interest charges that you have to pay if you keep a balance from month to month.
- Various fees charged annually or intermittently by the card company or issuing bank.
The first problem is easy to fix. Pay off your entire balance every month. If you do this, you will not have to worry about interest charges. This means you should not borrow money using your credit card. Instead, use an online personal loan, which is for a fixed amount, so it is easier to manage than credit card debt.
Secondly, you will need to research a card and look at all fees associated with it before you sign up. This includes annual fees.
When is a credit card safer?
When making purchases online, you should use a credit card. You should also use one at any automated payment console (such as a gas station where you pay at the gas pump). Why? Most fraud occurs when information is stolen during online or automated transactions. With a credit card, you do not have to part with any money until you pay your bill. This means that you can report any fraudulent charges before you have to spend any money.
What about debit cards?
Debit cards are easier to manage. You do not have to worry about making payments on time. However, you should use online management tools to check your account so that you can consistently:
- Be aware of your balance at all times.
- See if there are any fraudulent charges.
If you can make this extra effort, a debit card might be for you. In fact, if you become familiar with using online personal loans when you need to borrow money, you may not need a credit card at all.
You should also be aware of fees associated with debit cards. Some charge for ATMs and most will charge for overdrafts. You should learn about ATM fees, but if you are managing your account correctly, you should not have to worry much about overdrafts.
If you opt for a prepaid debit card, you should also be aware of monthly fees, and you should choose a card that will allow you to check your balance easily either online or over the phone.