Don’t Use Debit Cards in 5 Situations
While credit cards and debit cards may look almost identical, not all plastic is the same. Your choice between using a debit card or a credit card is something you must understand. A credit card has recourse for un-authorized charges while a debit card is a direct line to your bank account with little recourse.
Here are 5 places and situations where it can pay to leave that debit card in your wallet.
1. ATMs
There is a trend that Criminals are getting better with skimmers and planting them in places you’d never suspect — like ATM machines on bank property. So take a good look at the machine or card reader the next time you use an ATM or self-check lane.
2. Deposit required
When you rent some home improvement equipment at a big-box store, it may require a sizable deposit. – This is where you want to use a credit card instead of a debit.
That way, the store has its security deposit, and you still have access to all of the money in your bank account. With any luck, you’ll never actually have to part with a dollar.
3. Online Transactions
Since the debit card links directly to a checking account, so, usually it is not safe to regard debit cards as your online transaction tools. If you have problems with a purchase or the card number gets hijacked, a debit card is “vulnerable because it happens to be linked to an account.
4. Restaurants
Some establishments will approve the card for more than your purchase amount because, presumably, you intend to leave a tip. So the amount of money frozen for the transaction could be quite a bit more than the amount of your tab. And it could be a few days before you get the cash back in your account.
5. Recurring Payments
We’ve all heard the urban legend about the gym that won’t stop billing an ex-member’s credit card. Now imagine the charges aren’t going onto your card, but instead coming right out of your bank account.
Another reason not to use the debit card for recurring charges: your own memory and math skills. Forget to deduct that automatic bill payment from your checkbook one month, and you could either face fees or embarrassment. So if you don’t keep a cash buffer in your account, “to protect yourself from over-limit fees, you may want to think about using a credit card” for recurring payments, says Breyault.
May 31st, 2011 at 8:46 pm
The days are gone that you could get credit by simply being a warm body. Will these times return? Probably not, but they definitely will not return while our economy is in such bad condition. Today’s lenders are very selective as to who gets credit. As an example, an excellent credit score used to be 720 or better. That score is now 760 or better, because money is tight. Good credit would then follow at around 700 to 760.