It’s convenient to make purchases on your debit card, but there are some instances when it’s not such a great idea. Sometimes paying for an item with a debit card could put your hard-earned cash at risk. If you want to protect your money, it’s important to make choices that will help reduce your chances of falling prey to scammers and identity thieves. Here are purchases you should avoid making on your debit card.
If you need to make purchases throughout the day, you don’t want to start with a trip to the gas station. When you pay with a debit card, the gas station will place a hold of anywhere from $50 to $150 on your card. Although some gas stations will give you a discount for using cash or a debit card, this hold will prevent you from making purchases for a few hours or even days. In addition, if your checking account balance is low, you could run the risk of bouncing checks. Consequently, you’ll face insufficient funds fees and a negative mark on your ChexSystems report.
When using a debit card at the pump, there is also the possibility that a skimmer has been installed. If you happen to unknowingly swipe your card through a skimmer, your security code will be captured, and your account could be cleared out by criminals in no time. Avoid this and use credit for gas station purchases.
2. Online items
Making an online purchase with your debit card is risky business. If a thief gets a hold of your debit card information, he or she has direct access to the funds in your bank account. That means, just as in the credit card skimmer situation, your account could be emptied out in a matter of minutes. Your debit card number could also be used by thieves to create a fake card.
Thanks to the Electronic Fund Transfer Act, if you alert your bank about the fraud within two business days, your liability is generally limited to $50. (That liability rises to $500 if you notify your bank within 60 calendar days.) Although debit cards have some protections, not having access to the money in your bank account for a few days could put you in a very tight spot. Your best bet is to use your credit card or obtain a temporary number just for times when you make online purchases. For example, Bank of America customers have access to temporary numbers through the ShopSafe program.
3. Restaurant meals
Paying for your meal with a debit card could result in money trouble. Once your waiter leaves the table with your card, you have no way of knowing who has access to your number. As soon as the card is out of your sight, a number of people could have the time and opportunity to steal your information. Furthermore, some restaurants keep customer payment information on file, which could pose additional opportunities for your information to get stolen. Instead, pay with cash or credit.
4. Big-ticket items
You’re better off placing a large purchase on your credit card. This way you’ll benefit from added protections that you wouldn’t be able to receive from a debit card. Most credit cards feature benefits like extended warranties, price protection, and purchase protection.
A final note
Another reason you should limit your debit card use is that you could miss out on credit card rewards if your issuer offers them. Why leave rewards on the table? Whether you decide to use debit or credit, just make sure to think before you swipe. Your financial health depends on it.
More from Money & Career Cheat Sheet:
- Credit Sins: 7 Mistakes People Make When Using Credit
- 5 Ways to Pay Down Credit Card Debt Faster
- 4 Purchases You Should Not Charge on Your Credit Card
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