I'll wait for the experts to chime in, but from my understanding I think a lot of it comes down to fraud protection.
Debit cards are linked directly to your bank account, so if the security were to be compromised, it's gives the hacker direct access to your money. From what I understand, it's a more difficult process to get your money back after fraudulent activity when dealing directly with a bank.
Credit cards add an extra layer of security between your purchases and your bank account. Most credit cards will give you $0 fraud liability, and disputing fraudulent charges is easier since there's additional protection of your funds.
Both are relatively safe at this point. Banks protect their customers from fraudulant transactions on their debit cards. I lost my debit card once on a bus in Chicago and it got stolen and charged up and the bank gave me the money which was stolen back in a prompt fashion. The amount of spending I do is low so I don't get much in rewards when I just use credit cards. Also,, for me using credit cards increases the risk that I will go into debt so I mostly use my bank card. I feel it is safer in the long run for me because when I use a credit card I sometimes don't want to pay the bill so I let it go and could end up back in debt. To the person who was saying that "smart people don't use debit cards" I say that is untrue. I know myself and I prefer to use my own money and not borrow money from others because I know myself and know that I have been in a lot of trouble in the past with credit cards and I don't want to end up in debt again. Does that make me not financially savy or something? I don''t thinks so,
Unfortunately, your practice of not using your credit cards much is contributing to your low limits. In order to build your credit, you need to demonstrate that you can use your credit cards responsibly and consistently.
Before I realized the beauty of points and cash back I always used my debt card. Now it only gets used to desposit checks or to pull out money. Why not get rewarded for spending money I planned to spend anyway.
I had a friend who was the victim of fraud on his debit card, likely card skimming at a gas station. He had >$20,000 drained from his checking account before fraud detection caught on, and that money was "gone" for almost 2 weeks while they tried to clean up the mess.
Bottom line: ALWAYS USE CREDIT WHEN YOU CAN.
The bank was violating the law when they made your fiend wait until their investigation was finished to credit the account back. Visa requires that the money be put back within five days and the law says it has to be within ten days.
I'm not one to use a debit card except for Capital One's 20 cents on each purchase, but I think people are way too paranoid about the card being skimmed. How many times has the credit card you use been skimmed? A credit card and debit card have the same chance of getting skimmed or hacked into, so you really aren't safer using a credit card over a debit card. I have had credit card information compromised, but never a debit card. It's not really a good idea to keep all money in one account for many reasons. If you are paranoid about it, you could open another bank account and deposit a few dollars in it and keep it for the times when a debit card is needed.
Like I said in my post, "almost 2 weeks." It very well may have been 9 or 10 days, which is within the confines of the law. I would rather not have my cash tied up for even one day when I could avoid it by just using credit.
Personally, I've been the victim of card skimming 3 times in the past 5 years. It's not paranoia if someone is actually following you.