Debit card vs credit card for online purchases

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Forums › Finance and wealth management › Debit card vs credit card for online purchases

k1w1k1d

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#305807 5-Jun-2023 10:51

I currently use a Westpac Mastercard with a fairly high limit for online purchases.

With the increase in card fraud, I was wondering if I should get a debit card tied to a new account and only keep a minimal amount in the account. If the card got hacked the most I would lose would be what was in the account.

Is this a good idea, or not?

Cheers.

Sorry, I hit enter by mistake.

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#3085048 5-Jun-2023 10:56

is there supposed to be any content in your post @k1w1k1d

Dingbatt

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#3085049 5-Jun-2023 11:06

It’s certainly what I do. I have limited funds in the debit card and just transfer funds into it as required. I know there are procedures with credit cards to get ‘incorrect’ transactions reversed, but to me it’s easier to minimise the loss in the case of fraud by not having too much in the account.

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Rikkitic

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#3085051 5-Jun-2023 11:16

As above.

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k1w1k1d

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#3085053 5-Jun-2023 11:19

Thanks guys.

Looks like I will be taking a trip to the bank to organise this.

Cheers.

Linux

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#3085055 5-Jun-2023 11:30

Not sure if you can do this in the westpac App but in the bnz app you can disable ' Online purchases ' & ' shopping overseas ' can even disable paywave & ATM use

I enable Online Purchases when required

huckster

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#3085059 5-Jun-2023 11:45

I have a zero-fee credit card with a limit of $1k alongside the daily driver for those cases where I am not 100% confident of the seller.

Doesn't get used very often tbh.

rscole86

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#3085062 5-Jun-2023 11:49

My understanding is that the banks are insured for this and cover any fraudulent transactions. But like you said, if you don't want to have any hassle on the rare occasion it happens then get a Visa/MasterCard debit.

If you don't already have one, and will likely want one for travel, then I'd recommend a Wise account.

Wise let's you create virtual cards, your physical card is protected and you can turn on/off ATM use, online purchases, chip and pin, and mobile wallets. You can also freeze the card if you're not using it. Lastly, delete the virtual card if you no longer want it.
Added bonus, you get great foreign currency rates for your purchases.

I personally won't stop using my local bank credit card, I get rewards and interest free periods, which a debit card doesn't give me, and as I've got an offset mortgage it makes even more sense to use a credit card.

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richms

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#3085065 5-Jun-2023 12:02

The main hassle with the card getting compromised is waiting on a new one, which means waiting on post, and then updating everything. My main rewards card I do not use other than on other financial processors - so if the site redirects out to a windcave page, or paystation or whatever then I will use it, but if they dod the dodgey of iframing a payment page or it looks like I am just entering into their own site, I use the low interest ASB visa instead.

I would suggest to see if you can get a second credit card to use on dodgy sites, so you are not out the money when its compromised. Or if they take afterpay/zip/humm/paypal/any other payment provider use that and put them between you and their site.

Debit cards get an annual fee, when the banks offer you nothing with them and get all the profit from merchant fees for doing nothing for you or the merchant. I only have mine because banks seem to refuse to give you a spare eftpos card, so mine stays unused other than when I have left the eftpos card in the car or something and I want to buy something from a place and dont want to burden them with the card costs.

Richard rich.ms

l43a2

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#3085120 5-Jun-2023 12:58

personally, i would always use credit cards online vs your own money.

michaelmurfy

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#3085125 5-Jun-2023 13:18

As others say, with a credit card you're protected against fraud but also with a credit card if fraud occurs it isn't with "your money" and fraud cases are normally resolved quicker than a debit card.

I've worked for banks and also worked on the fraud side of things for a number of years and my advise is actually use your credit card for this. In the ~10 years of credit card ownership with me I've never had my card compromised. Here are also a few tips:

1) If there are alternative payment processors (eg, PayPal or even Afterpay) then use those over entering your card details on a site.
2) Never use Poli, account2account or those screen scraper type services (if you've seen my posts on other threads, I can't stress this one enough).
3) If you're unsure of a sites security or if it is legitimate check for reviews, how old the site is, if the offer appears to be too good to be true or if in doubt use a virtual card from Wise.
4) If Apple Pay / Google Pay exists on a site then go ahead and use it. These don't expose your actual card number and instead only expose a virtual card which does change every now and then.

I totally get if people want to mitigate risk with using a debit card but when working in fraud I've actually found those customers who get fraud on their card are often worse off than those who get fraud on a credit card just due to the "real money" being gone aspect. Sure, you have the annoyance of having to replace your card but if you have a debit card along with a credit card you're covered in all cases.

ASB and ANZ also offer a "Card Tracker" service (with goMoney it is hidden under your card details) and will show the last 13mo of merchants who have your card details. This makes it easier to update details for those sites if your card ever gets replaced.

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richms

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#3085126 5-Jun-2023 13:25

Also never have the debit card go from an account you have money in. Have the money in a seperate one that only an eftpos card or no card can get access to so your money is safe till you use the app to move it to the debit when needed to pay with it.

With ASB you need to watch it as at an ASB atm you can access all suffixes with a card which means if you get skimmed on a card that only has access to an account with stuff all in it, they could still send one of their mules to an ATM with the clone to see what else they can access.

Richard rich.ms

Rikkitic

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#3085131 5-Jun-2023 13:57

richms:

Also never have the debit card go from an account you have money in. Have the money in a seperate one that only an eftpos card or no card can get access to so your money is safe till you use the app to move it to the debit when needed to pay with it.

With ASB you need to watch it as at an ASB atm you can access all suffixes with a card which means if you get skimmed on a card that only has access to an account with stuff all in it, they could still send one of their mules to an ATM with the clone to see what else they can access.

Do you happen to know if this is also true for Kiwibank? That would be my only concern.

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richms

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#3085134 5-Jun-2023 14:36

Rikkitic:

Do you happen to know if this is also true for Kiwibank? That would be my only concern.

No idea. Don't use them, don't think I ever will.

Richard rich.ms

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#3085142 5-Jun-2023 15:31

For in person transactions, I tend to use debit card for transactions under $100 (2% cash back perk for HSBC AU customers). For any larger amounts or non in person, I use my credit card.

With my NZ cards, I always used credit first, eftpos second. Online eftpos considered for places like PB tech or Auckland council. I never used a Visa or MasterCard debit card in New Zealand.

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cruxis

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#3085143 5-Jun-2023 15:39

I use debit card for online sites, I link it to a account that has zero money in it. Whenever I buy something online I just transfer the right amount over via internet banking and then make the buy.

I would never link it to everyday transaction accounts, savings etc, keep it at near zero $ when not intending to use.

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