Credit-card and debit-card accounts are vulnerable to thefts, so neither type of account is safer in that regard, because both can be targeted for fraudulent activity. Debit cards carry more financial risk for consumers, because they're usually linked to cash that people need to pay daily expenses. Yet consumers should take precautions to protect both types of accounts.
Thefts
Both credit cards and debit cards are used by thieves to obtain cash. According to a Consumer Reports article titled "Debit-Card Skimming Scams," thieves who steal credit-card numbers often charge merchandise that's later sold to acquire cash. Debit-card thieves use a method called skimming, in which they attach a device to an automated teller machine (ATM) or some other debit-card processing equipment to capture debit-card account information. Thieves use the information they collect to create phony debit cards to steal cash directly from cardholders' accounts through ATMs.
Hacking
Credit-card and debit-card account information can be stolen by people who hack into retail payment systems. For example, a "USA Today" article titled "Hackers Breach Heartland Payment Credit Card System" notes a 2009 incident in which Heartland Payment Systems revealed that hackers infiltrated computers that at one time processed about 100 million card transactions for merchants each month. In such cases, cardholders usually are instructed to keep close tabs on their accounts to ensure no fraudulent transactions appear. It's often impossible to determine exactly which accounts may be as risk of theft when large batches of information are exposed to hackers.
Financial Risk
Debit cards present more financial risk to consumers than credit cards do in cases of theft. Debit cards usually are linked to cardholders' checking accounts. So, any cash that's stolen may be the money that cardholders need to pay their bills. The U.S. Fair Credit Billing Act limits the amount that credit-card users have to pay for fraudulent charges to $50. The amount debit-card users have to pay for fraudulent transactions is linked to how quickly they report that their cards have been stolen. For example, people who don't report the theft of their debit cards within two business days of discovering they're missing could lose up to $500 as a result of fraudulent withdrawals from their accounts.
Online Security
Credit-card and debit-card users should take precautions to guard their account information when shopping online. A "Wall Street Journal" article titled "Identity Theft and Credit Card Fraud -- How to Protect Yourself" recommends changing password information every month on websites in which you frequently use your account information. Beware of phishing scams in which phony business emails are concocted to make them appear they're from legitimate retailers, banks and other businesses you know. The emails usually ask for personal information that can be used to steal from your accounts. It's best to directly access the websites of companies with which you do business instead of clicking on a link included in an email, because the link may not be legitimate.
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