1. Fraud come most often from customers (who have nothing to lose), not from merchants (who need to maintain their reputation). As a matter of fact, fraudulent chargebacks cost more than $11 billion a year: http://www.dailyfinance.com/2014/03/20/friendly-fraud-costs-... This is why merchant love Bitcoin's irreversible transactions. This fact alone cuts down most of the fraud that currently occurs with traditional payment systems.
2. In the extreme minority of cases where a merchant is malicious, credit cards are actually terrible. Handing over all your identity details (CC number, expiration date, CVS number, billing address, etc) allows the merchant to steal your identity and make fraudulent charges. Identity theft costs $25 billion a year: http://www.businessinsider.com/bureau-of-justice-statistics-... It is possible but a PITA (and still costly!) to recover from a serious identity theft accident... That's why Bitcoin is an improvement because a transaction authorizes merely a transfer of coins and nothing else, so the malicious merchant cannot cause further damages. On top of that, Bitcoin also allows you to completely get rid of this possibility of even losing coins, via cryptographic escrow systems: two-party trustless escrow (http://blackhalo.info/wp-content/uploads/2014/06/whitepaper_...), or 3-party escrow but where the escrow does not even has access to the funds (https://bitescrow.org/)! All this is completely infeasible with traditional payment systems. Surely, the practicality of such escrow systems will increase overtime. Don't judge Bitcoin based on its current imperfections, but envision what is possible.