Credit may beat debit for online purchases

However, consumers who use debit for online purchases may be taking a risk, Fox Business reports. Debit cards remain uncovered under the Fair Credit Billing Act, which can protect credit card users from serious errors such as defective products and improper shipping. The risk is greater online, as returns can take longer and be contested by companies.

“Federal protections are far less for debit cards than credit cards,” Ken McEldowney, executive director of San Francisco-based Consumer Action, told Fox. “If someone in a small shop wants to take your card in a back room for authorization, I’d be nervous.”

By contrast, debit cards fall under the Electronic Funds Transfer Act, which covers loss and theft, the news source says. Under federal law liabilities for lost or stolen credit cards are kept at maximum of $50. With debit cards, this number may run as high as $500.

Still, online shoppers are likely to outspend those at retail stores. The National Retail Federation’s holiday shopping survey, which polled more than 8,000 Americans, suggests online consumers will spend an average of $858.49, compared to $688.87 at traditional merchants.