Is It Safer to Pay by Credit Card or Check?

Credit cards and checks are both convenient ways to pay for products and services. You may be wondering whether one method is safer than the other. If you are concerned about staying safe when using either method, it’s important to understand what would happen if you were the victim of check or credit card fraud.

When you mail a check to make a payment to an out-of-town vendor, you must contend with the risk that a thief could steal the check from the mail and alter it to withdraw funds from your account. If you use a credit card to buy goods from an out-of-town vendor, you face the risk that Internet hackers could intercept your card information by illegally accessing the vendor's website or computer system.

You face a lower degree of risk when you make an in-person payment using a check because you hand the check directly to the merchant. When you make an in-person credit card payment, on the other hand, you still face the risk that a technically savvy thief could tap into the merchant's computer system and steal your account number.

Therefore, in-person check payments expose you to less risk than credit card payments. However, when you pay with either a check or credit card, you still face the danger that the merchant could steal your account information and try to defraud you.

Under federal law, you are responsible for up to $50 of fraudulent charges that post to your credit card account. If you report your credit card lost or stolen before any charges post, then you have zero liability. Generally, you are not liable for any charges that post to your checking account as a result of checks being stolen or altered.

However, in some instances banks can hold you liable if you routinely allow other people to have access to your checks and account information. Therefore, you have less liability for charges stemming from check fraud, assuming the bank cannot make a case that you are somehow to blame for the fraud.

You face less risk and have less liability for check fraud, but check fraud can have a more damaging effect on you than credit card fraud. If a thief uses your credit card, you may realize the theft occurred when your credit card gets declined by a merchant. If a thief drains your checking account, multiple withdrawals such as your mortgage, car payment and utility could bounce.

Your bank will eventually refund its own overdraft fees but has no responsibility to refund fees charged by your mortgage lender or other creditors. It normally takes a few days before your bank credits the money back to your account, and a few days without access to your checking account can seem like a long time compared with a few days of no access to one credit card.

Credit cards are a convenient way to pay for items. It is quite easy for some people to get used to spending on their cards. If someone has the discipline to pay off the balance each month, using a credit card to pay for gas, groceries, and other everyday expenses can be a good idea. It can help the credit card customer earn reward points from the credit card company and may help to build their credit rating.

However, if someone lets their credit card spending get away from them, it is very easy to get into debt. If they are unable to pay their credit card bill on time, their credit rating may drop.

The decision about whether it is safer to pay by credit card or check is a personal one. It may depend on the type of item purchased, the merchant’s policies (some don’t accept checks), or your preferences. Before making a decision, think about the amount you are spending and how well you know the other person or company involved.