Using a debit card is risky just about anywhere. Here’s where you should definitely skip debit to avoid theft or surprise fees getting taken from your bank account (not to mention overdraft charges).
Debit vs. Credit Safety
When your debit card is used, that money is gone from your bank account; this means that if someone else gets your debit card number and goes on a shopping spree, the money is long gone. Even if you do track down the crook with your card, you may still be stuck with heinous overdraft fees and a lack of funds. In 2007, debit card holders who fell victim to the T.J. Maxx customer data breach waited an average of two to three months to get reimbursed. With a credit card, you’re able to spot sketchy charges on your card and report the fraud before they’re drawn from your bank account.
7 Place to Never Use Your Debit Card
- Online. This is the LAST place you want to give out your bank information. Malware on your computer or others spying via your wireless network makes you far too vulnerable, so use credit instead. Also, your data goes to the merchant you buy from, where you’d be safer leaving a credit card number on file.
- Big-ticket items. If something goes wrong with the giant TV you just purchased, you’ll be glad that money’s not missing from your bank. More importantly, many credit cards give you an extended warranty on many pricey items like electronics.
- Restaurants. If your card is going to be leaving your sight, don’t hand over the key to your bank account! Restaurants with many regular customers often keep card numbers on file to make things more convenient, and you definitely don’t want your bank info lying around on that list. Like any situation where your number could be stolen, using credit is safer.
- Buy now, pick up later. In cases where you aren’t receiving a purchased item on the spot, it’s best to use a credit card. This way, you can stop payment if the item isn’t received, and you won’t be out the money while the store takes its sweet time returning the funds.
- Recurring payments. Remember when you signed up for a one-year gym membership… and two years later realized you were still being charged every month? Maybe you’re wondering, “But what if I go over on my credit limit?” What’s worse: overdraft fees, or bad credit?
- Travel. Being on the road is a bad situation in which to find yourself strapped for cash; since you may be spending money at many businesses you are unfamiliar with, it’s wise to avoid swiping your debit card anywhere.You especially want to avoid using debit at hotels, gas stations, or car rentals. These types of businesses can hold onto extra money in case you leave without paying for hotel amenities used, damages to a rental car, or gas not paid for (when you prepay). This freezes a good chunk of the money in your bank account until your bill with the business is settled, which could leave you without money while traveling and result in overdraft fees. If you do use credit, make sure you won’t be going over your credit limit with the deposits from hotels or car rental services. In any situation where a deposit is required, use credit to keep money in your bank until the deposit is returned or used toward a purchase. Many credit cards offer car rental insurance coverage, making credit a much smarter idea than giving the car rental people your bank info. When booking travel far in advance, it’s best to use credit – especially if you might end up canceling the trip. This way, the money’s not taken out of your bank account any sooner than it needs to be.
- ATMs. Scammers place skimmers over ATM slots to steal your card info when you slide it. Yikes! Outdoor ATMs are easier for crooks to get to; they can easily plant skimmers or cameras to get your bank information. So if you must use an ATM, stick to indoor ones in high-traffic retail areas.
Keeping Your Cash Safe
Federal law limits your liability for fraudulent transactions on a debit card to $50–as long as you report the fraud within two days of the theft. Check your bank account regularly, and set up alerts to inform you if unusual spending occurs.
3 comments
asdfsdfklhh
this is garbage. never use your debit card at ATMs? what are you going to use, a credit card? say hello to 30% cash advance
Joe Blow
complete bs. most of these are tips for people who don't care to manage their own finances. if you are checking your account balance daily and keeping track of purchases then there is absolutely nothing to worry about here. using a debit card is just like writing a check like everyone did 20 years ago. back then you kept a record of your checks and reconciled your account so you knew exactly how much money you had. you still need to do that. overdraft fees are convenience fees that the bank charges you because they made you a short term loan to cover the cost of your purchase because you were too lazy to make sure you had enough money in your account. that doesn't make the bank evil. it's a good thing - especially since you opted in to the service in the first place.
Steve Parker
According to this article, there really isn't a safe place to use your debit card...