Some expenses are better paid off using your debit card while others are a no-no. Following are 9 things that you should not pay with your debit card and are better off settled with your credit card or plain cash.
- Online shopping
In this case, credit cards offer more protection under federal law. Also, just think about it: if cybercriminals get hold of your debit card number, they can instantly drain your account!
Criminals make a living off gas stations. Card skimmers are everywhere. It does not help that fuel pumps and payment terminals are unmanned. Using a credit card is not a risk-free option but using a debit card guarantees that your PIN will be stolen.
- Dining in restaurants
Unless the servers bring you a handheld payment system, you should not hand them your debit card or let it out of your sight for that matter.
- Booking hotels
Did you know that hotels put a hold on your payment card not only to secure your room but also to cover incidentals? If you pay with your debit card, they will imemdiately take the amount from your bank account. The money is refunded after you check out but it may take a few days.
- Any rental
Similar to hotels, rental companies put a hold on your card. The deposit will be taken straight out of your account and the money will be inaccessible for a few days. Worst, if you rent a car, providers perform credit checks, which can ding your credit score.
- Big purchases
If you purchased new furniture and it arrives in disarray, you can dispute this easily and get your money back. The payment will be withheld under the Fair Credit Billing Act until your credit card company is done investigating. If you paid with a debit card, your money will be long gone from your bank account before you even notice any damage to your purchase.
- Cash withdrawals at independent ATMs
This is unsafe because independent ATMs tend to be unmonitored. Fraudsters can easily compromise them. If you need to withdraw cash, use an ATM from a physical bank near you.