Dodging Debit Dangers: Be Careful Where You Swipe
To cut down on my debt, I’m trying to use my credit cards less and debit card more. Many times we whip out the credit card to pay for things we can’t afford, and end up digging ourselves a big hole. Don’t get me wrong, I’m not anti-credit card, as long as you can pay the balance in full every month. Trouble is, doesn’t always happen.
With debit cards, the money is taken out of your account right away, so you usually don’t have to worry about overspending. It seems like a safer option. But there are some debit dangers. Here are some places and situations where you should think twice before using your debit card (info from creditcards.com):
- Online. Credit Union National Association’s Susan Tiffany says, “you have potential vulnerability there,” since the debit card links directly to a checking account.
- Big ticket items. They don’t offer the same protections as a credit card, especially when it comes to questioning charges.
- Restaurants (or anywhere your card is taken out of your sight). “They can either use what’s called skimming and skim your card through a card reader, and get the information that way that they’re use fraudulently, or they can just write down the number,” according to John Breyault with the National Consumers League. Others say the advice of “don’t let the card out of your sight” just isn’t practical.
- Future travel. Book your travel with a debit card, and “they debit it immediately,” says Linda Foley, founder of the Identity Theft Resource Center. So if you’re buying travel that you won’t use for six months, you’ll be out the money right away.
- Hotels and gas stations. They may put a hold on more funds than your actual purchase. That could push your account balance into the red, and cost you extra fees.
So while curbing credit card use to cut down on debt is a good idea, going totally debit isn’t always the best thing. Just be careful where you swipe.