Why do credit cards have bigger security than debit cards?

Question

So, I was getting another account at the bank, and there were all kinds of variety and options. To cut the story short, that bank worker and me started to talk about my options over debit card and credit card, and he said:

Credit cards have much bigger security than regular debit cards.

Why and how is that so? Isn't security for all cards the same?

Answer 1

Credit cards are not more secure in the technological sense. Rather, they are safer (as far as an individual is concerned) in that it is much easer to deal with credit card fraud than debit card fraud, should it occur.

The reason for this is fairly simple. This article explains it pretty well:

The key difference: With a credit card, the card issuer must fight to get its money back. With a debit card, you must fight to get your money back.

DEBIT CARD FRAUD

According to the EFTA, your potential liability for fraudulent debit card transactions is virtually unlimited. You have up to 60 days to report a lost or stolen card under the EFTA. After that, you simply lose whatever money was taken, even funds siphoned from linked accounts.

CREDIT CARD FRAUD

Under the FCBA, your maximum liability for fraudulent credit card transactions is $50. If you report your card lost or stolen before any fraudulent transactions occur, your liability is zero. Many credit cards promise zero liability for all fraudulent transactions.

“I’ve had my credit card information stolen and used fraudulently a number of times,” says Tucker Spillane, a 24-year-old credit analyst from New York. “Fortunately, my issuer almost always picks up on it right away … usually because the activity is considered abnormal from my typical spending habits. And they provide their own fraud coverage anyway. I’ve never had to pay a dime.”

In practice, this means that if fraud occurs on your credit card, a simple phone call to your CC company saying "this charge is fraudulent" will likely resolve the issue on your end. They'll issue you a new card, the fraudulent charge will be removed, and no money will ever be deducted from your personal checking or savings account.

In contrast, with debit card fraud, the money is immediately deducted from your personal bank account. Even if you are ultimately not held responsible for it, it may take weeks or months for the money to be restored while the case is investigated. If you don't have enough money in cash or in other accounts left to cover day to day expenses, you're just out of luck.

EDIT to add: The above reference is US-specific. The situation is similar in many other countries but you should research the fraud protection laws that pertain to the country you live in.