Which kind of credit or loan is best for protecting you from fraud?

May 25, 2017
Credit card fraud and identity theft are major concerns for modern-day consumers. Though it is still possible to rely mostly on cash, almost everyone needs at least one credit or debit card in their wallet. Without at least one card, online purchases are impossible, and you will always have to deal with the inconvenience of stopping at a bank when your cash runs out.
Which kind of credit or loan is best for protecting you from fraud?

So the real questions is not “do I need a credit card?” It is this: “what is the best way to protect myself from fraud?” 

Which card is safest?

Today’s debit cards come with a chip and a pin number. The pin offers more fraud protection than the older “swipe-only” cards, but debit cards still have one major drawback. When you make a purchase with a debit card, the money is drawn directly out of your account. With a credit card, the money is paid in the form of credit, so it does not actually leave your bank account until you make a payment at the end of the month.

So there is an extra layer of protection for credit card users. At the very least, they will have time to deal with any fraudulent charges before they actually have to part with any of their money.

Credit card companies are generally better at dealing with fraudulent charges as well. Most major card issuers have special fraud departments and, again, they will be able to put payments on hold until they resolve your fraud claim.

You are also able to make fraud claims for debit card charges. The important distinction, however, is that your money has already left your account, so you may have to wait to get it back while the bank investigates your claim.

Check all your accounts regularly

Almost all banks offer online account management tools. You can log on regularly and check your recent purchases. This is not only a good practice for detecting fraudulent charges, such online account management sites are also useful for keeping track of your spending so that you do not go over budget.

You may not be able to totally stop the possibility of fraud, but you can limit the dangers by catching any theft early so that it can be dealt with before it becomes a major problem.

Use online loans instead of credit cards

Another option, especially if you have to make a large purchase, is to apply for an online personal loan. These loans, often available for up to $750, are an alternative to a standard credit card. Such loans do not come with the same fraud dangers.