The FBI Is Giving Holiday Shoppers This Advice

Keep your money safe this holiday season.

At this point, we can safely say the holidays are in range. You might not yet be finished with your holiday shopping, though, and if you've still got more gifts to buy, it really pays to consider what payment method you're using for them.

The FBI is urging consumers to skip the debit cards for holiday shopping, and lean on credit cards instead. If you've never really considered the differences between these payment methods before, you might wonder why. Keep reading to learn the advantages of credit cards over debit cards for your holiday purchases (as well as your shopping all year round).

Credit cards > debit cards

Credit and debit cards look basically the same -- a plastic card with your name, an account number, a security code, and an expiration date. And if your debit card is linked to the Visa or Mastercard payment system, it really will look like a credit card. But as you'll see, credit cards offer a lot more perks for users.

Credit cards offer better fraud protection

It's easier than ever for bad actors and scammers to get a hold of your financial data and steal your money. Using a debit card to shop online, pay for travel expenses, or make other purchases can leave you vulnerable. If you use your debit card for an online purchase and it turns out to have been a fraudulent site that steals your information, all of the money linked to that card (say, in your checking account and maybe also a savings account) could be gone.

You have recourse through your bank the sooner you report a problem with your debit card. If you tell your bank before any fraudulent charges occur, your liability is $0. But if you notify them within two days of money loss, you'll be out $50. After two days (but less than 60 days), you'll be out $500. After 60 days, you're out of luck.

For a credit card, the most liability you'll ever have in a fraud situation is $50. However, many of the best credit cards offer $0 liability to customers, making them the safer choice when it comes to financial protections.

Credit cards let you dispute charges

Credit cards offer other protections to consumers. This is thanks to the Fair Credit Billing Act of 1974. One perk given to credit card users is the ability to dispute charges other than just fraudulent ones. Sometimes, mistakes are made and you're accidentally charged twice for a purchase, or charged $350 on your $35 restaurant tab. Ideally, you'd reach out to the merchant first to get them to resolve the problem, but if they aren't receptive, you can dispute the charge with your credit card company and get your money back.

Credit cards can make it easy to get refunds

On the subject of getting money back, credit cards also give you the ability to get money refunded when you make a purchase that never arrives, or that has some issue with it. Just like in the above point, you should ask the merchant first for a refund or a replacement, but if they don't come through, your credit card company will help you out.

Credit cards earn rewards

This isn't really a financial safety issue, but it is worth mentioning that credit cards give consumers the chance to earn cash back or rewards on spending we have to do anyway. This can be a really great way to hedge against the rising cost of living. If you spend a lot in certain categories, such as at grocery stores, you can aim to get a credit card that pays a higher cash back percentage on your purchases. Some debit cards offer rewards, but they are few and far between.

You should still use caution with credit

Credit cards have great perks and protections, and as such, it's worth using them for your everyday purchases as well as holiday shopping. However, credit cards can also be a danger in that they make it very easy to go into debt. Carrying credit card debt is expensive -- interest rates are high and also variable, and thanks to this year's Federal Reserve interest rate hikes, it costs more than ever to be in debt. So exercise self control and caution, and try not to charge more than you can afford to pay off before the next billing cycle (when interest will be added to your balance).

As you're wrapping up your holiday shopping, be safe out there and take precautions with your money. The easiest way to ensure your money is protected is to rely on credit cards to make those festive last-minute purchases.