debit cards safe

Why a Debit Card is Safer Than You Think

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Are Debit Cards Safe?

This question pops up all the time and people are often more confused about this topic than they need to be. The short answer is YES, your debit card is just as safe as the credit card. Are they different? Absolutely. However, you can stop worrying yourself to the point of going into debt because you were once told by your golfing buddy that debit cards weren’t safe at all. In fact, I will prove to you they are just as safe as your credit card in the next 30 seconds. Here we go!

The Debit Card

Debit Cards have been given a bad rap over the years. They aren’t as cool as the credit card because they lack the sophistication of rewards points. They usually don’t come with an airline miles perk and they typically don’t send you cash back right before Christmas. To put it simple, the majority of society views the debit card as the ugly red-headed step child when compared to the credit card. They are boring, they don’t reward you, and they don’t have cool commercials to tell you how awesome they really are! Think about it, when was the last time you saw a really cool DEBIT card commercial?

We have also been bombarded with the idea that debit cards are not safe. We even tell our friends they aren’t safe because it is just common knowledge, right? WRONG! Debit cards ARE just as safe as your credit cards if you use them correctly. That’s right, there is actually a strategy to using your debit card. We will get to that later on in the post.

Let’s start here: Take your Debit Card out of your wallet or purse. Look down at it and in the bottom right corner is a logo that says VISA or MasterCard. That logo is your protection. They protect you just a like a credit card. In fact, let me tell you word for word what VISA and Mastercard have in writing about their zero-liability policy in regards to using your Debit Card:

Visa’s Zero-Liability Policy

Visa’s Zero Liability* Policy is our guarantee that you won’t be held responsible for unauthorized charges made with your account or account information. You’re protected if your Visa credit or debit card is lost, stolen or fraudulently used, online or offline.

Mastercard’s Zero-Liability Policy

Whether you use Debit MasterCard to shop online, by phone or in a store, every purchase is backed by Zero Liability Protection*. That means you won’t be held responsible in the event that someone makes unauthorized purchases with your card.

I didn’t make this up. I pulled it straight from the Visa and Mastercard websites. However, we are constantly bombarded by the “experts” with the idea that debit cards are “dangerous” because we are not fully protected if card was used fraudulently. Why didn’t these “experts” just call and ask VISA or MasterCard their policy? Better yet, why not take a few minutes and visit their website?

Now that we have debunked this myth, you need to understand how to obtain the protection from Visa or MasterCard. Get a pen and paper out and take notes because this is where it gets tricky:

Step 1:
Every time you use your debit card, run it as credit.

Step 2:
There is not a step 2, just a simple step 1.

Have you ever wondered why the cashier asks you “Debit or Credit”? Is there a difference between the two, and if so, what is it? Why is this whole money thing so confusing? Never fear, I have you covered.

Choosing Debit

When you punch in your pin, money is immediately taken out of your account and sent to the vendor. You need to be careful no one sees your pin (a lot of wise guys out there) or you could be held liable up to $500 at some institutions if someone else were to use your debit card fraudulently. Get in the habit of only using your pin number at the ATM. Better yet, get cash from the teller and you’ll never have to use your pin number.

Choosing Credit

When you choose credit, you are giving yourself full protection from the big guys, Visa and MasterCard. The money now goes from your bank, through the Visa or MasterCard system and then to the vendor you are buying from. Also, you aren’t punching in your pin which provides another layer of safety and you are obviously protected by the zero-liability policy by both Visa and MasterCard.


I have first-hand experience to tell you it is going to be okay. Our family hasn’t had a credit card since 2011 and life still goes on. We go on vacations, rent cars, buy crap stuff online, and we have survived contrary to what society will lead you to believe. We even had our debit card used fraudulently at no fault of our own. We were charged twice for a subscription to a gaming system in the Middle East at $199 each. Ouch. However, I made a simple phone call to Visa and the charges were reversed immediately. Boom!

The Good, The Bad, & The Ugly of the Debit Card

The Good

One brilliant way to stay out of debt is to stop using a credit card. We went to the extreme of cutting our cards up and closing the accounts once they were paid off. We learned it was much easier to stay out of debt when you didn’t have a tool to go into debt waiting for you in your back pocket. Now that you are aware of the protection that comes with a debit card, this is a no-brainer.

The Bad

Make sure you understand that you are going to lose out on those precious rewards points. This was a tough pill to swallow – at first. Banks are not stupid. In fact, they are brilliant and spend more money on your behavior with their product than any other industry on the planet. They know you are going to spend more when you swipe anything plastic. They know you will chase points. There is a very primitive emotion of joy every human has when we are “rewarded”. Even as a toddler, you like praise, you want the trophy, and that is exactly what those rewards are doing. Have you ever wondered why everyone seems to be “paying off their credit cards each month”, yet the tallest buildings in the world are named after banks? Hmmm…..I wonder why that is? They are smarter than you and I. Accept it.

The Ugly

Using a debit card isn’t always going to be all unicorns and rainbows. They want you to rely on a credit card, so they will often make it a pain to use a debit card. First, you may have a hold placed on your debit card when you check into a hotel or rent a car. However, if you can’t afford a $300 hold on your debit card, then you probably shouldn’t be going on vacation, right? Secondly, there are also a few rental companies out there that still will not let you rent a car with a debit card. Lastly, you are going to be a weirdo among your family and friends. Everyone uses a credit card, so why shouldn’t you? Answer: I would rather be weird with money than normal and broke. Boom!


Fun Fact: In 2014, $30 Billion was paid out to banks in the form of overdraft feesClick To Tweet

Podcast Episode 004: The Debit Card: The Red-Headed Step Child of Personal Finance

Fun Fact

In 2011, $29.5 Billion was paid out to banks in the form of overdraft fees (TIME). That is ridiculous. Our great grandparents are looking down at us in disgust because we allowed laziness to cause $30 billion to leave our back pockets because we were too lazy to do some 5th grade math and care just enough on the concept of money in verses money out. Create a budget, follow the budget, and even use cash! All of your wildest dreams will come true 😯 . With great power comes great responsibility, therefore be good to your debit card and it will be good to you.

It’s time to start becoming smart with our money. It is after all the money we have worked so hard to earn and therefore we must work hard to keep it.Credit cards are not evil and the banks aren’t out to solely get us. They are however in the business of making money (duh), and we are their target audience. Be aware some of the fear that has been created around the use of the debit card is simply a way to get you to use their products in a way that helps them put their logos on the tallest buildings in the world. The more you know…….the more you know.

Be good to yourself, your friends, your love, and BE GOOD TO YOUR MONEY!


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14 replies
  1. Susan
    Susan says:

    What do you know about amazon money? I saw on the internet that you could get money for selling items to Amazon. Can you find out how this work? Or if is legit. Thanks Susan

    • Peach
      Peach says:

      Susan, I’m not completely familiar with it, but I have found that Amazon doesn’t do anything unless it’s legit. I’ll look into it more and see what I can find out. Thanks for the heads up and for reading MP!

  2. SavvyJames
    SavvyJames says:

    Nice coverage of the pros and cons of debit cards. I carry two credit cards (the second is a backup in case there is an issue with the first) and one debit card. As you note, there are unique situations where it is preferable to use one type of card over the other.

    • Peach
      Peach says:

      Hey there James! Just out of curiosity, why do you use credit cards? I am not saying your credit cards are evil or anything silly like that . I’m just curious. Thanks for the comment and I look forward to hearing back from you!

  3. Hanna Ah-Mai
    Hanna Ah-Mai says:

    Wow i never knew all this. My problem is I dont want to carry cash around because it is either stolen by someone or use it on the stuff that dont need.

  4. Sherry
    Sherry says:

    This is the best reassurance on the debit card discussion I’ve seen, so thanks! We’ve been hacked twice in the past but none since using our debit as a credit. Can I assume the same protection applies when making purchases online? I notice that it always shows Visa or MasterCard when filling in the payment forms. Also, while I used to feel safe making purchases most anywhere online, now I choose to shop no more than three well-known merchants & I think that helps reduce risks.

    • Peach
      Peach says:

      Hi Sherry! You should never have to enter your pin online ever. When using your debit card online, it is ran through Visa or MC system. Thanks for sharing and I agree on shopping at the well known reputable online retailers out there

  5. Gina
    Gina says:

    Wow, this is actually the reassurance I needed. And here I’ve been, nagging my boyfriend for not having a credit card this whole time!

    I used to rely on my debit card but then I got nearly $1,000 drained from my checking account around the holiday season. I got it all back, but it still freaked me out and I was kind of brainwashed into thinking that debit cards are evil and not as secure as credit cards.

    Welp, guess what. I’ve also had fraudulent charges made on my credit cards (again, I’ve never had to pay the money) … and I find it’s wayyy easier for me to get carried away on my spending w/ them. I miss the debit card days because it’s so much easier to budget with them. Thanks to this post, I think I’m ready to give ’em a try once more.

    • Peach
      Peach says:

      Hi Gina!

      Also, you should know you can (and should) run your new EMV chip debit cards as credit too! Just stick your card into the reader and then run it as credit WITHOUT using your PIN. Badabing-bada-boom!

  6. Charles
    Charles says:

    > Just stick your card into the reader and then run it as credit WITHOUT using your PIN.

    But doesn’t sticking it into the reader identify it as a debit vs. a credit card?

    How do you process it as credit after it’s in the reader?

    • Chris Peach
      Chris Peach says:

      Sometimes it does and sometimes it doesn’t You can usually opt out of using your pin by hitting the cancel button or telling the cashier that you want to run it as a credit. If all else fails, tell a white lie that you “forgot” your PIN number. If they want you to pay for your purchase, they’ll find a way to run it as a credit card instead of debit. 🙂

  7. Heather Paulsen
    Heather Paulsen says:

    Mr. Peach, you are not quite correct. Regulation E protects credit card users and debit card users from fraudulent activity by an unknown user or a user not authorized to make a routine charge to your card. Credit cards offer the protection of a method of resolving merchant disputes- e.g., you authorize them to charge you $595 for a special, advanced toothbrush but they charge you $595 send you a $5.95 Colgate Oral Plus. With a debit card, any type of problem with the quality of the good or service is your responsibility because it is not protected by Regulation E- the bank can and will tell you that it does not satisfy the “fraudulent” requirement because you allowed them to use the card in the first place. Using your debit card “as” a credit card does not invoke Regulation E. Using your debit card for any major purchase is a very dangerous idea if you want protection against unscrupulous vendors or defective items.

  8. JW
    JW says:

    This is poor advice. Google on the differences and there are plenty of reasons for preferring true credit cards to even debit cards ran as credit… and one major concept is just that a true credit card purchase is money you supposedly owe that you can dispute vs money TAKEN FROM YOU that you have to work to try to get back. And how quickly you notice the fraud can affect whether you get it back. Also, if you get hit with some big debit charge (as credit or not) and it depletes your balance and now other payments come through and rack up overdraft fees and bounce other payments at other merchants and such and you do not notice this in a timely manner, you have a mess… and likely some delays and work in getting it all resolved. Why risk that? With a credit card, you dispute a charge far more easily and simply do not pay the fraudulent amount. It does not leave you financially stuck in the short term waiting for your money back and cleaning up wider messes.

    There are many other benefits with extra services that come from credit cards (car rental insurance coverage, concert ticket presale opportunities, etc)… as well as the extra dispute options Heather pointed out.

    In the end, everything financial comes down to self-discipline. It takes self-discipline to not use a credit card. It takes self-discipline to use one… and takes self-discipline to use any version of a debit card as well. Any form of spending takes: self-discipline.

    So, in the end, if it always comes down to self-discipline and a true credit card itself offers more protections, discounts, and rewards, I would say it is just wise to use a credit card unless you really really just cannot control your spending. I think most people do not have that problem.

    I NEVER use my debit card. Instead, I do the opposite of what this article would suggest and I always charge everything I can charge without paying fees for using a credit card and pay off the balance every month. All gas, all food, any utilities or daycare that will let me charge, etc. I generally get at least $50 a month in rewards by doing this. If someone paid you $50 a month just to use a credit card over a debit card, why not do that? Or, take Target. If I pay cash or debit, I pay full price. If I use my Target Card, I get 5% back immediately. Again, I just have to pay that off every month to lock in those savings. It is not that hard… especially if I would have paid it on debit anyway, and then clearly I would have had the money, I just needed to pay out from my bank instead.

    On that note, I am careful with how I use my bank accounts. I do not make purchases or pay bills externally where they pull the funds from my account. I do not give out my bank account or routing number or any debit card account other than to places built to interact with them (like PayPal). Otherwise, I only push funds by using my own bank to send out the payments I choose. If a business allows auto-pay, I only do it if it can be done with a true credit card and no processing fees or I do not auto pay and instead use recurring payments from bank bill pay.

    Another benefit to charging so much on a credit card is my bank account transactions are far less as I send payments mainly only to the credit cards. That makes it much easier to see the transactions that go on to help notice anything fraudulent. Plus, the credit card makes it easier to see my spending there both on a month and in really nice year-end summary documents they supply that break down purchases into categories (another benefit to the credit card).

    This article is tainted by the author having weird pride in the fact that he does not use credit cards. I hope people read more into the comments and think rather than taking this misguided advice. What I am saying may come across a bit snarky, but this whole article was snarky (“told by your golf buddy”)… it deserves the return viewpoint. Again, google around and you will find plenty of discussion of the differences and greater complications with fraud issues when it comes to money that came out of your bank account. Or talk to anyone it has happened to. Bank account fraud just happening to a friend is what made me google and find this article of bad advice. She is now mad at her bank over their fees and delays relative to this and plans to change to a different bank over it. It is definitely not as simple as pointing out the fraud and it being easily instantly addressed with no consequences. The closest you get to that is with a credit card. Be wise.


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