Using a debit card to pay for purchases is fast and convenient. Your card is linked to your checking account, is light and easy to carry, and you don’t have to sign for purchases. But there are situations in which using a debit card can mean big trouble for your bank account and cost you a considerable amount of money. In these five situations, consider using your credit card instead.
Filling up at the gas stations. Gas stations are prime targets for a scam called “skimming”. Criminals place small card-reading devices inside gas pumps, and steal your information when you swipe your card. Use your credit card at the gas pump, or go inside to pay. Credit cards offer more protection against fraudulent charges, whereas stolen debit card information can lead to a drained bank account.
Large purchases. Debit cards are great for everyday expenses like groceries, but use a credit card for larger purchases such as expensive jewelry, designer clothing, and gifts. If something is wrong with a purchase, you can dispute the charge with your credit card company. If you used a debit card and the vendor won’t issue a refund, it is difficult or impossible to recover your lost money. Some credit card companies even offer extended warranties on big-tick items.
Online shopping. Online shopping is convenient, offers you access to a wider variety of products, and is usually a pain-free experience. But you might occasionally find yourself dissatisfied with a product that arrives in poor condition – or does not arrive at all. If you used a credit card, disputing the charges will be much easier. Using a debit card online also puts your bank account at risk, since any online transaction could be intercepted by criminals.
Restaurants. Since it is common practice in many restaurants to send your card with the server, who swipes it into the system and later returns it to you, your debit card information could be at risk. Any time your debit card could leave your line of sight, it’s better to use a credit card instead.
Purchases that involve a deposit. Any time you rent a hotel room, car, or moving truck, your final bill is not determined until you return the rented item or vacate the premises. Using a debit card in these situations may result in a “hold” on funds in your account, rendering them unavailable to you. Use a credit card instead, so that you don’t tie up the money in your bank account. Also, if you disagree with the final charge, it is easier to dispute it when you use a credit card.
In any situation where you do use a debit card, remember that you have two days from the time of the transaction to report any unauthorized charges. If you fail to report suspicious charges within two days, you could be responsible for the first 500 dollars. Depending upon your bank’s policies, you could even be on the hook for the entire fraudulent charge. Any time you’re unsure of the situation, use a credit card instead.
