Online shopping is kind of a big deal. Even before 2020, e-commerce retail sales have been steadily increasing over the last 20 years. Lockdowns in the second quarter of 2020 boosted that number up quite a bit. Even at 11-12 percent of total sales in 2019, that number probably seems small for those of us who shop online all the time. But whether you’re shopping online for the first time or the millionth, here are three reasons you should use a credit card instead of a debit card when you make an online purchase…
It has more fraud protection: If your credit or debit card is lost or stolen, you’ve got some protection thanks to The Fair Credit Billing Act (FCBA) and Electronic Fund Transfer Act (EFTA). According to the Federal Trade Commission (FTC), “your liability for unauthorized use of your credit card tops out at $50. However, if you report the loss before your credit card is used, the FCBA says you are not responsible for any charges you didn’t authorize.” That’s great news. If it’s your debit card that’s lost or stolen, the news isn’t quite as good … “If you report an ATM or debit card missing before someone uses it, the EFTA says you are not responsible for any unauthorized transactions. If someone uses your ATM or debit card before you report it lost or stolen, your liability depends on how quickly you report it.” Click here to see a chart that explains more about how that works.
It’s good for your credit score: Some people enjoy using their credit cards for every purchase they make online or in-person and paying the balance off at the end of each month. That method has value, but it definitely isn’t for everyone. However, if you were to choose to use your credit card for a handful of online purchases each month, it would be a great way to build your credit history and boost your score, while still being a responsible credit card user.
It has rewards: No one has ever been rewarded for using their debit card. Unless you consider the things you purchase to be rewards. But with a credit card, you have options! Whether you prefer earning cash back or getting travel perks, there’s definitely a credit card out there that’s perfect for you. Remember, if you’re going to start using your credit card more, just make sure you’re using one that has benefits that work for you.