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If I purchase something on line and am given the choice to pay with a checking account (also known as a current account) or a credit card, is the risk of my checking account data being stolen and used fraudulently less than if I pay by credit card? This is for scenarios such as if entry of my information is intercepted through a keyboard logger, or if the site stores my information and is then hacked, is it more difficult for the thieves to take the checking account information to make a fraudulent purchase than it would be to do so if they obtained my credit card.

  • I'm really confused why you would think that giving out all the details of your bank account is "less risky" than using a credit card? This question is like "is playing with C4 less risky than playing with cap guns?" – R.. Dec 17 '15 at 0:27
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    Agreed, the question would have been better phrased as what is the difference between the two. – rguy Dec 17 '15 at 13:27
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In regards to your specific question, which is safer technically depends on the site and how they implemented their security.

That said, the credit card is a safer bet from a recovery standpoint. If your banking details are compromised, the attacker can drain your entire checking account, and there's very little recourse to get that money back. However, if your credit card details are stolen, you aren't liable for the fraudulent charges made, the credit card company is.

This answer applies to the US, where the FTC mandates the following protections:

  • Credit card fraud liability cannot exceed $50.
  • Debit card fraud liability is $50 if reported within two days of fraudulent charges.
  • Debit card fraud liability is $500 if reported within 60 days of fraudulent charges.
  • Debit card fraud liability is max if reported after 60 days or not reported at all.
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    Also, it's probably usually easier to change your compromised CC number than to change a compromised bank account number. No need to get new checks, for example, and no need to worry about any outstanding checks with the old number. However, the reasons you've mentioned already are obviously more important. – reirab Dec 16 '15 at 22:34
  • I feel like this is an over simplification. Having had my credit card details stolen, I can say that it is not simply a matter of saying you didn't make the fraudulent purchases and then everyone says "Fine" and the credit card company takes on all the liability. – Todd Wilcox Dec 17 '15 at 2:16
  • I doubt this is true for all jurisdictions. The OP doesn't state their location. – Neil Smithline Dec 17 '15 at 4:48
  • From the recovery standpoint, I am fairly certain an account holder is not liable if a crook steals the paper checks, forges the signatures, and proceeds with fraudulent activity. I would think there would be a similar protection if someone steals the account number, looks up the routing number and makes a fraudulent purchase on line. – rguy Dec 17 '15 at 13:34
  • @rguy Yes, but also look at my answer. – billc.cn Dec 18 '15 at 17:36
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is it more difficult for the thieves to take the checking account information to make a fraudulent purchase than it would be to do so if they obtained my credit card

I had an experience over a decade ago that tells me the answer is 'no'. I went to a store, paid with a check and the cashier turned around and processed my check through a credit card machine.

A while later, when I got my bank statement, I found the same check number had been debited from my account twice. It was the same amount and the same check number. When I called my bank, they told me this was not their problem and I needed to take it up with the store. This wasn't a big deal since I knew the owner and it was a mistake on the part of the cashier that he resolved immediately.

What I learned from this, however, is to only use checks when I don't have the option to use a credit card (or a check card as a credit card.) The fact that you can pay with a check online should indicate the risk here. All a thief really needs is your routing number and they can drain your bank account. As mentioned by Greg, you generally are responsible for theft from your bank account (the same goes for debit cards when you enter your pin) but you are not responsible for fraudulent charges against your credit card.

In most cases you pay for the processing fees that allow the credit card companies to cover these losses anyway since most retailers don't charge extra when you pay with a credit card (gas stations being the most common exception) so you might as well let them take the risk. It's not really your problem if your credit card information is stolen as long as you monitor your activity and report fraud in a timely manner.

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In addition to the existing wonderful answers (a bit long for a comment):

In many jurisdictions, the money stolen from a banking account will only be returned to the victm when the ciminals are convicted and have funds to cover the losses. Banks will not be liable unless the victim can prove the bank is at fault and even then many will only reimburse the victim after the court preceedings.

If the account involved is a person's main cash/savings account, his/her livelihood could be severely impacted.

Credit card users have a much simpler and quicker dispute/charge back process (and in extremes can simply refuse to pay the bill) and the responsibility of investigation will fall on the card issuer instead of the user.

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You can obtain a credit card with a fairly small credit limit -- this comes in handy for purchases from independent shops online, which might be using old software/security. This limits the damage a thief can do, and sits on top of the liability benefits of using a credit card. Now that more and more places use paypal, this maybe isn't as important as it was a few years ago - but a fairly small credit card used for pyapal, and a separate one never used online could still be reasonable.

If someone maxes out your (online) credit card, you still need to be able to buy food, pay bills/rent/mortgage etc. For some of these it's hard to build in redundancy for your bank account.

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