/ Money

Debit cards take over online – but are you at risk?

A credit card close up

Barely a week goes by where I don’t order something online using my debit card. But am I putting myself at risk by using my debit card instead of a credit card?

Online spending using debit cards has hit £35bn in the UK, according to the UK Cards Association. In fact, debit card spending overtook credit card spending online for the first time last year, by more than £1bn.

It makes sense that debit card transactions are taking over online, particularly when you consider that 91% of the UK population have debit cards while only 61% have credit cards. Personally, I prefer to use my debit card because it takes the money straight from my bank account, helping me to budget from day-to-day. When we talked about cash vs plastic, Melanie explained why she uses her credit card:

‘I tend to use credit cards for just about everything because of the rewards, convenience and security. […] There is one main consideration to always keep in mind: if you use a credit card for a purchase, will you pay off your balance in full each month?’

A growing sense of security

The increase in debit card use online suggests that people are starting to become more comfortable putting their payment details into websites. But does it actually make a difference what type of cards we use to make our purchases, online or offline? Well, as it happens, it can make a difference to your rights as a consumer.

When it comes down to it, you’re afforded a little more protection if you use your credit card to shop online instead of a debit card. For example, if you bought something from a business which then folded before sending you the item, you should be able to claim the money back from your credit card issuer under Section 75 of the Consumer Credit Act 1974. However, this only applies if the item costs between £100 and £30,000.

That doesn’t mean there isn’t any protection at all for debit card users. If you found yourself in the same situation but had paid by debit card, you may be able to claim the money back using Chargeback. There’s no minimum limit on how much you have to have spent, but you will have to register your claim within 120 days of discovering the issue. However, there’s no guarantee that the Chargeback will be successful as it depends on whether there’s money there to be clawed back.

How to shop safely online

If you’re worried about using your payment cards online, you can run a few simple checks to make sure the site is safe. For example, check for a padlock sign in the browser window, which indicates the site is secure. You should keep all of your passwords for extra verification safe and secure, and always log out of a website after making a purchase. Finally, make sure you regularly check your statements for unexpected debits.

I use my debit card to make online purchases, but I do try to stick to well-known brands I know I can trust. Do you use your debit card to make purchases online, or have you stuck with a credit card? Or do you avoid making purchases online altogether?

What type of card do you use to shop online?

Credit card (45%, 552 Votes)

Debit card (21%, 260 Votes)

Either debit or credit card (20%, 244 Votes)

Online payment services eg Paypal (12%, 146 Votes)

I don't shop online (3%, 39 Votes)

Total Voters: 1,240

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I pay my credit card off each month so use it whenever possible for purchases – omline and offline. I don’t see the point in using a debit card unless there is a charge for a credit card – I get a month’s interest free credit, protection, reward points and just have to budget to pay off the card once a month. But I do keep track of purchases (Microsoft Money) to ensure I know what I am spending.

Why would one want to buy something with a debit card instead of a credit card when the transaction amount would be the same? It doesn’t make sense financially. With a debit card, you pay 100% of the transaction amount; with a credit card, you pay only 99% or even less, depending on whether you receive cashback, airmiles, points or something else from the card issuer.

For transactions that go wrong, the protection offered by a credit card is significantly higher than with a debit card. One of the most obvious advantages is consequential losses. If you bought an airline ticket for £500 months before the flight, but the airline went bust only days before the flight when competitors were charging £2000, you could claim £2000 from a credit card issuer (under Section 75), but only the original £500 from a debit card issuer.

Nevertheless I’m happy that so many people use debit cards, because they are subsidising the costs of the same retailers accepting my credit card payments without any surcharge. Continue if you wish!

I normally pay by credit card unless there is a surcharge, in which case I use a debit card, online payment, cheque – or cash for small amounts.

Agreed. Two rules:
1. Pay with a credit card only if it costs the same as other forms of payment (or if the surcharge is less than the cashback or other rewards).
2. Always pay the balance in full every month. Use it as a means of payment, not as a means of borrowing.

I strongly advise paying credit card bills in full by Direct Debit if you can afford to do this. If not, there might be cheaper ways of borrowing money.

I prefer to pay my credit card bill online with a debit card – just keeps control over the payment. It is important to keep your credit card receipts and check your statement is correct – mistakes do happen – including fraudulent transactions.

I do this and every debit I have queried has turned out to be genuine.

Jennifer, paying off your credit card becomes a habit. I check my statement when it arrives then put the amount and date I need to pay into Windows Calendar with a reminder.

Hi Jennifer. If you use a debit card for everything, your bank balance will rarely reflect your true position because recent transactions haven’t yet hit your account. Therefore it’s better to use a credit card and keep your own tally of how much you’ve spent. Then you’ll pay less overall as well as having better protection.

Mrs M Lenor says:
28 May 2020

Personally I hate to be cheated so I would only claim back what I was due. Otherwise I would be doing what I loath being done to me. Maybe you do not mind being cheated!!!!!

Jax says:
3 July 2013

I use PayPal whenever possible. Then I don’t have to share any card details more than necessary. This wasn’t an option in the poll!

My daughter’s PayPal account was hacked into and purchases made charged to a debit card. Took a while to sort out. I presume she was not alone. I would think using a credit or debit card directly is a more secure option.

PayPal is the worst option. You get no Section 75 protection at all because it breaks the three-party relationship. Furthermore their buyer protection finishes a long time before one’s statutory rights, so if something goes wrong several months after a purchase, you’re on your own. Avoid it.

Thanks for that advice NFH. I hadn’t crossed my mind that PayPal might be more risky; I have only used it once when there was little alternative and have avoided it ever since. I hadn’t appreciated the drawbacks you mention. For consumables from trusted retailers [very few!] I use a debit card, for everything else it’s a credit card.

This is useful because PayPal can be the only payment option when using eBay etc.

Why does the above Which article suggest that Section 75 applies to PayPal transactions? It does not. I escalated a complaint about this to the Financial Ombudsman and it was refused, even on appeal, and I had copious advice from Which Legal Service.

Thank you nfh for raising this point as it does seem Which? is giving a mixed message here on PayPal and credit/debit card protection.

Hi NFH, we say that you ‘may’ still be able to claim. There are differing legal opinions on this point. We think there is an argument that when you use your credit card through PayPal and the funds go direct to the seller, you may have Section 75 protection.

The more complete guide for your PayPal rights is this one: http://www.which.co.uk/consumer-rights/problem/can-i-claim-against-paypal-if-i-dont-get-what-i-paid-for/

Patrick, the scenario you describe is exactly what happened, but the Financial Ombudsman refused it and suggested there is never a scenario where PayPal transactions would benefit from Section 75 protection. You’re welcome to contact me directly if you want further details.

Mrs Margaret Lenor says:
28 May 2020

Thank you for your intelligent information. However, It goes through PayPal even when one does not know it. Because of bad press about PayPal (that is why I stopped using them) they pop up even un-invited! I think it was on Amazon whereby I used my Debit Card and it went through PayPal which was the last thing I wanted. I am not sure that I am understood but I know it went through PayPal and I was extremely annoyed. As they are losing customers I think they are using devious means now, to stay in business. I absolutely loath large cheating businesses.

franco says:
5 July 2013

we use a little pocket book to record debits and credits for our debit card account. money is transferred from a bank account over the phone which is quite easy. a statement is received at the end of the month and if necessary pop into the bank for an up todate staement.no more than £ 300 is kept on the card for safety.

I usually use a credit card for online purchases because of the CCA protection (section 75). I don’t find it any harder to budget since I record everything I spend in an accounts book. I pay the bill in full each month so there’s no interest to pay.
What I really hate is “Verified with Visa/3D Secure”. Firstly it rarely works properly and secondly there is no way to verify that the embedded screen is actually from your bank. I have had to give up on many transactions (at great inconvenience) due to this.

Emerald says:
25 June 2014

Do you think the verified by visa is a plot to shift blame from banks to the consumer?

Will you prefer a better secure solution or just your usual card payment without verified by visa?

It could be; I don’t know. However I am convinced it adds no security benefit for the consumer. I would prefer a better secure solution if one becomes available. There’s no shortage of technology and something in addition to simple “passwords” would be good.


On-line banking is not as secure as we are generally being led to believe. I do not do on-line banking as being a computer buff for several decades I cannot count the number of times I have been told something is fraudproof etc etc and within a period of years the assurances are found to be false or at the least economical with the truth.

If you are going to on-line bank at least have a secondary account to keep most of your money safe. I know the Banks will sort you out if it is a “legitimate” fraud but how are you going to manage in the meantime?

I recently had my debit card scammed, I don’t even know when or who but 89 transactions went through over a couple of days. Luckily I have been refunded but the feeling of not knowing how it happened has made me totally paranoid. It will be a long time before I buy on line or use card again.

Douglas Parkes says:
13 January 2018

When I wanted to pay my eye consultant for treatment using my debit card, his office would not accept it because, they stated, they would be charged 3% for the transaction

Mrs Margaret Lenor says:
28 May 2020

I wonder if this helps people at all. I have one account for the computer. I keep a few pound in it and that Is all. When I want to buy on the computer, I go through to the bank and ask them to transfer what I need. Maybe a hundred or less. Then I make my purchase. If anyone gets into my bank account there is only a few pound in it. However, I was thinking of paying and getting a Credit Card, because the money goes out to the seller immediately with a Debit Card and sometimes you get rubbish goods that you would never buy, and you do not get the money back. I understand (have not checked with the bank yet) that a few days grace is given with a Credit Card before the seller is paid. This gives one time to cancel the payment, if the goods are not as advertised. After reading the above remarks though about Credit Cards I think the way I am paying now is maybe the best. I will just try to stop using Ebay and Amazon. Too many crooks sell on these sites. This is only my opinion of course. I have sent goods back before, more than once, and the money has not been forthcoming. It makes me very angry, and I want to stop using Amazon now, as I have ALREADY ceased to buy on Ebay — however tempting! Please do not tell me that one can complain about it and receive help to get their money back. These sites need the money that the seller pays them to advertise on their sites otherwise they are out of business. There will always be ex cons and cops and robbers on these sites.

There will never be a safe way to do anything the way the world is at the moment. One has to take a chance and do the best they can, and stay honest themselves.