shopping onlineHere are two facts that will come as no surprise to you.

Fact #1: Online shopping in the U.S. exploded during the Covid pandemic reaching a massive $469 billion in 2021.

Fact #2: Cybercrime is on the rise with theft through online payments and general identity theft the most common types of fraud. A Javelin Strategy & Research study found that losses from these kinds of fraud reached $28 billion in 2021.

With ever expanding payment options, we have become accustomed to the convenience of sending money digitally by credit card, debit card, peer-to-peer apps, and digital wallets. However, the ease of transferring money instantly comes with risks if you do not take precautions.  (Just ask the millions of Americans who lost that $28 billion.) Not all digital payment methods are the same when it comes to security. Here are the safest ways to pay—the methods that offer you the most protection—and the one to avoid.

PayPal. Many cybersecurity experts say that your safest digital payment option is PayPal because you are lowering your risk by only sharing your credit card number with just them, not the many different companies where you are shopping. In a security briefing Express VPN, a virtual private network service, points out that “[a]nother benefit of using PayPal is the company has strong cybersecurity measures in place, like end-to-end encrypted transactions, whereas if you use a credit card, the security of your transaction comes down to that of the online shop. PayPal also allows for semi-anonymous payments—at least insofar that you can register an account with a throwaway email address and prepaid or virtual debit card.” PayPal only charges a fee for commercial transactions. Transferring money to family or friends is free.

Credit cards. “Credit cards remain one of the safest options for online purchases,” reports. “They come with extensive fraud protection from the card issuer. As long as you monitor your statements and report any unauthorized charges promptly, you are protected against liability. Only use credit cards on secure sites and never provide the full card number unless on a trusted merchant’s checkout page.”

All major credit card issuers offer zero liability protection, a guarantee from them that you won't have to pay for fraudulent charges made without your consent. This includes charges made if your credit card number is used by a cyberthief, your wallet is stolen, or you drop your credit card and someone picks it up and uses it. 

Additionally, many credit card issuers now offer phone and computer apps which instantly report all transactions. If a fraudulent transaction pops up, you can report it to your credit card company right away and can quickly stop any unauthorized charges.

Apple Pay/Google Pay. These two payment methods are very similar to each other, and both are considered quite safe, because your actual credit card number is never shared with the business where you are shopping. Wired magazine notes that “[b]oth services use tokenization, creating a unique code whenever you make a purchase—the merchant never sees your credit card number, and even if a thief were to somehow steal that code, they wouldn't be able to use it to make more purchases.”

“[Also] Apple and Google Pay…are locked behind the fingerprint sensor or face recognition on your device, adding an extra layer of security that credit cards don't have. So even if someone were to steal your phone, they'd have a hard time using it for a Best Buy shopping spree.”

Third-party payment apps.  Higher up on the risk scale are Venmo, CashApp, and other peer-to-peer payment apps which are risky to use with strangers. These apps have fraud rates three to four times higher than credit cards, according to identity theft protection company Aura. advises to “[o]nly use them when paying people you know well in your personal network. And never return the money that a stranger ‘accidentally’ sends you on Venmo.”

The payment system to avoid: debit cards. Because with a debit card the money comes right out of your checking account, recovering funds lost because of fraud will be very difficult and maybe even impossible. According to the Identity Theft Resource Center in California, a nonprofit consumer education organization, debit cards are more vulnerable to fraud than credit cards.

“If your card is hit by fraud, your protection under federal law stinks with a debit card, compared with the protection offered by credit cards,” the not-for-profit U.S. Public Interest Research Group(U.S.PIRG) reports. “With a credit card, your liability in case of fraud or errors is limited to $50 if you notify the card issuer within 60 days after the statement listing the transaction is mailed. With a debit card, the $50 liability limit expires two days after the fraud. Then your potential liability goes up to $500.”

Falling victim to debit card fraud can be painful. U.S.PIRG goes on to say that “[i]n the typical case of debit card fraud, consumers spend 28 hours making phone calls, dealing with their bank, filing police reports, getting a new debit card, changing automatic payments to the new card, etc. In one study, the typical case of debit card fraud amount exceeded $2,500, and consumers ended up with $800 out of pocket that they didn’t get back.”

For everyday purchases, a credit card is always a better choice than a debit card. Save your debit card for getting cash at the ATM and even better, ask your bank for an ATM only card instead of a debit card.




Sean D. Cuddigan
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SSA and VA Disability Attorney in Omaha, Nebraska
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