Use your debit card for one of these expenses, and you can risk the balance of your bank account, your credit score or even identity fraud.
A debit card is very similar to cash because transactions are immediate. The moment you check out is the minute the money leaves your bank account.
The use of debit cards can also be risky. They do not offer much financial protection and are more attractive to thieves in certain situations.
For these and other reasons, it is sometimes better to use a credit card or cold, hard money. Here are six examples:
1. DO NOT USE YOUR DEBIT CARD FOR ONLINE PURCHASES
It is safer to pay with a credit card when shopping online, according to the US. Federal Trade Commission (FTC).
If a cybercriminal intercepts your debit card number, they can immediately clear your account.
Credit cards are delivered with more protection. Credit card transactions are protected according to the Fair Credit Billing Act:
“This federal law provides you with certain consumer protection, such as the ability to dispute billing errors and withhold your credit while examining the disputed charges.
Perhaps more importantly, the law generally limits your responsibility for unauthorized credit card costs to $ 50.”
2. DO NOT USE YOUR DEBIT CARD FOR TO BUY GAS
Petrol stations can be hotspots for criminal activities. According to Visa, about 1.3 percent of the payment fraud in the US occurs with petrol pumps.
Earlier this year, the FTC warned travelers about the use of card skimmers at petrol pumps.
Skimmers are illegal card readers who can link criminals to payment terminals. Payment terminals for fuel pumps are attractive targets because they are not manned by employees.
The FTC continues:
“These card readers grab data to credit or debit the magnetic stripe of the card without you knowing it. Criminals sell the stolen data or use it to buy things online.
You will not know that your data was stolen until you statement or a current account credit”
Although this is not a risk-free option, a credit card is safer to buy gas.
If you need to use a debit card, the FTC recommends using it as a credit card.
If you use a debit card as a credit card, you do not have to enter the PIN code to keep your PIN code safe and the money will not be debited directly from your bank account.
3. DO NOT USE YOUR DEBIT CARD TO BOOK HOTEL RESERVATIONS
To secure your room reservation and to cover additional costs, hotels will keep your payment card in custody.
If you give a hotel a debit card, according to Frommer, it will take the amount of your bank account.
The money is returned after you have checked out. But it can take your bank several days to process the request, which means that the money remains inaccessible for a few days after your hotel stay.
Avoid the headache and reserve hotels with a credit card. Please note that you do not exceed your credit limit while the credit is on your credit card.
4. DO NOT USE YOUR DEBIT CARD FOR TO BUY BIG TICKET ITEMS
Have you ever had new furniture delivered, only to find the corners or the upholstery stained?
If you have paid with a credit card, you can dispute the costs and get your money back. Again, the Fair Credit Billing Act offers you the possibility to dispute credit card transactions and to withhold your credit card inquiries.
5. DO NOT USE YOUR DEBIT CARD FOR CAR RENTALS
If you do not have a credit card, renting a car will probably cost you more than the daily costs.
For example, some Avis, Budget and Hertz locations carry out credit checks on many customers who rent with a debit card, according to their websites. That can affect your credit score.
Some car rental companies may also block your debit card.
6. DO NOT MAKE SUBSCRIPTIONS AND AUTOMATIC PURCHASES WITH YOUR DEBIT CARD
In the age of meal delivery services, automatic ship program, and electronic toll roads, you may be tempted to set it up and forget it.
You simply place your debit card in the file and the company automatically charges you periodically.
But if you do not include these expenses in your monthly budget, your bank account may end up an overdrafted.
Use your credit card to avoid automatically recurring costs to avoid bank overdrafts.