Opt For “Credit” Instead Of “Debit” At These Risky Locations
It’s a familiar question we’ve all heard when making a purchase or securing a service: “Debit or credit?” You’ve heard it so often (maybe hundreds of times?) that you might not even think twice about which option you choose. But although debit and credit cards seem to offer the same convenience, opting for debit might not be the best choice in certain situations. Debit cards, unlike credit cards, subtract money from your bank account and they don’t offer the same consumer protection as credit cards. Without the backing of consumer protection, you can lose your money more easily than when you use credit. Here are five places where opting for using a debit card isn’t the best idea.
1. Big-Box Stores
Big-box chains are inviting targets for hackers — just as Target. Following a series of breaches, Target data on over 40 million credit and debit card accounts landed into the hands of fraudsters and criminals looking to cash in on stolen info. Home Depot,
TJ Maxx and Marshalls have also experienced significant data breaches. When this type of breach occurs, credit card holders are better protected than debit users.
2. No-Name ATM
Word to the wise: avoid off-brand ATMs. You might have seen them in a restaurant that’s hoping to avoid the fees associated with accepting plastic, or lurking in the back of a bar where patrons are looking for fast cash in order to keep the party going. In addition to paying extra fees for using the machine, you’re exposing yourself to skimming (when scam artists use devices that attach to card readers to steal card data). Because banks and large ATM operators have cracked down on fraud and skimming, independent ATMs and smaller operators have become bigger targets.
3. Car Rental Counter
It’s standard practice for car rental companies to pre-bill your card in the event you go over on mileage or bring the car back with the gas tank on empty; if you opted for using your debit card, you might be at risk of bouncing checks. In addition, if you opt to use debit a car rental company might perform a hard pull on your credit, which could harm your credit score.
4. Online Shopping
Here’s the bottom line on using debit for online shopping: Using a credit card online offers protection against faulty goods, fraud, and even failure to deliver. Most credit cards include a 60-day chargeback feature to help cardholders settle disputes. With a debit card, the onus is on you to get your money back from the vendor.
5. Gas Stations
You might want to put the brakes on using a debit card at your local gas station. Why? Gas pumps are hot spots for skimmers, which means you’re better off using a credit card, even if the service station adds a per-gallon fee for credit purchases. What’s more, a gas station owner will often put a hold of $100 or more on your account, which could last a few days, and if your bank balance is low, that hold could lead to bounced checks.