by Herb Weisbaum, The ConsumerMan

Last updated January 23, 2026

Some people find that using debit cards, linked to their checking accounts, helps them stick to their budget and avoid costly debt. And that makes sense.

But federal laws provide stronger consumer protections for credit cards than debit cards. And if you have a dispute with a seller your bank will be more likely to help you if the transaction was made using a credit card. Using a debit card also presents greater financial risks to you than a credit card.

Protection from Fraud

For credit cards, under federal law your maximum liability for unauthorized use of your card is $50 (and in most cases, you won’t have to pay anything). If your credit card number is stolen, but not the physical card, you are not liable for any unauthorized use.

For debit cards, you’re not liable for unauthorized charges if you notify the bank or credit union within 60 days the monthly statement being sent. If you wait longer, you could be responsible for the full amount of any unauthorized transactions.

Protection from Disputes

Visa and Mastercard highly promote their “zero liability” protection policies, which guarantee that you won’t be held responsible for “unauthorized transactions” if you “protect your card” and notify the financial institution that issued the card “immediately.”

But this zero-liability protection does not apply when you make a purchase with your debit card, there’s a problem after the sale, and the merchant won’t make it right. In that case, you may be on your own.

As we often explain, when you use a credit card you automatically get powerful consumer protections. The biggie: If you’re dissatisfied with your purchase or the service you received, you can dispute the charge and withhold payment. 

In our experience, credit card companies are far more likely to side with consumers than businesses in these disputes. According to data from Clearly Payments, consumers generally win 70 to 80 percent of chargeback disputes.

But if you’ve used a debit card and have a dispute, your bank is far less likely to help.

Wanda (who did not want us to use her last name) learned the credit-vs.-debit-card lesson the hard way. She responded to an ad offering free bottles of supplement pills and used her debit card to pay the $9 shipping and handling. The company charged her $180 and instantly withdrew that amount from her checking account.

“I called the bank right away and tried to get it stopped, but they said it was too late, and they couldn’t do anything except cancel my card,” Wanda told Checkbook.

Wanda complained to Fraud.org and made a lot of noise on social media. Eventually, the company returned the money. However, she remains frustrated that her South Carolina bank would not reverse the fraudulent payment.

“I got the money back, but I had to go through a lot to get it back,” she said. “It just aggravated the hell out of me.”

Consumers who can’t get help from their financial institutions often file complaints with the Consumer Financial Protection Bureau. Checkbook looked at some of those complaints and found a common theme: Problems related to debit cards (fraudulent charges, overcharges, non-delivery of merchandise, or delivery of broken merchandise) and banks unwilling to help.

In the complaint below, a customer from California describes how the bank refused to provide a chargeback when a new washing machine arrived broken:

“I tried for over six weeks to resolve the issue with the merchant on my own and only after they stopped all the communication I filed the chargeback. The merchant was contacted by me numerous times, and the merchant’s failure to respond was submitted in my detailed letter to the bank to help with a chargeback filing documentation. The bank refused to help by stating that they do not get involved in these types of disputes.”

A debit card holder in Arizona complained to the CFPB about the lack of assistance with an unauthorized $290 charge. The consumer had filed a dispute with the bank and was promised a provisional credit in 10 days if the issue hadn’t been resolved. After three weeks, the consumer contacted the bank and was told to file the dispute claim again. Another 30 days went by, and still no response or provisional credit.

“… At this point my account had gone into the negative [and] accrued numerous fees… [the bank] closed my account without warning because of a negative balance. The negative balance was due to service fees…”

Checkbook contacted the American Bankers Association about these types of complaints and received this statement: 

Consumers are protected from fraudulent card transactions, whether it is a debit or credit card transaction. For both, customers generally are not liable for ‘unauthorized transactions’ if they are reported in a timely fashion.”

Your Debit Card Is a Key to Your Banking Account

When you pay with a debit card, you are authorizing a withdrawal from your checking account. When you pay with a credit card, you are tapping a line of credit provided by the bank. So, the financial risks are significantly different.

“When you dispute an unauthorized purchase on your credit card, you aren’t out any money. However, when you dispute a suspicious $100 purchase on your debit card, for example, the bank blocks you from using those funds while it investigates,” said John Breyault, who runs the National Consumers League’s Fraud.org website.

By law, the bank or credit union generally has 10 business days (20 days for an out-of-state transaction) to investigate and respond when you report an unauthorized debit card transaction.

“If you need those funds to pay a bill, you could end up racking up late fees or bounced check charges while the bank investigates,” Breyault explained. “That’s why we strongly urge people to use credit cards when shopping online.”

And remember, there’s no guarantee the bank will decide in your favor and put the money back into your account.

Worried You’ll Spend Too Much Using a Credit Card?

Some people can’t handle credit cards. They run up huge balances that can jeopardize their financial well-being. If you prefer using a debit card to rein in your spending, consider using a credit card for online purchases or for shopping at companies with which you have little prior experience. This will provide that extra protection from fraud and other problems.

A credit card is also the better choice for major purchases, such as appliances and electronics, because you can dispute the charge if the item arrives broken or isn’t what was advertised. Some credit cards offer “return protection” as a perk.

“A smart financial plan includes a credit card and a debit card that you can use at the appropriate times,” said Bruce McClary, a vice president at the National Foundation for Credit Counseling.

Remember: Paying with a debit card does not provide any benefit to your credit file or help boost your credit scores, because it doesn’t involve credit.

Protect Yourself

Debit cards are an enticing target for cyberthieves, so it’s important to do a few things to reduce your risk:

Monitor your checking account. When it comes to fraud, the sooner you spot a problem, the better. Go online or use your bank’s app to review your account at least once a week. If anything seems suspicious, contact your financial institution immediately.

Limit the funds in your checking account. A debit card is the key to your checking account. If a crook gets your account information, they can drain all the money. The smart move is to keep enough money in your checking account to cover upcoming bills and transfer money from a separate savings account as necessary.

If you are unhappy with the way your financial institution handled a credit card or debit card dispute, file a complaint with the Consumer Financial Protection Bureau. You can report credit or debit card fraud to the Federal Trade Commission.
 
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Contributing editor Herb Weisbaum (“The ConsumerMan”) is an Emmy award-winning broadcaster and one of America's top consumer experts. He has been protecting consumers for more than 40 years, having covered the consumer beat for CBS News, The Today Show, and NBCNews.com. You can also find him on Facebook, Blue Sky, X, Instagram, and at ConsumerMan.com.