10 Places You Should NEVER Use Your Debit Card

This post 10 Places You Should NEVER Use Your Debit Card appeared first on Daily Reckoning.

Paying with your debit card might seem like a responsible move.

After all, getting in the habit of whipping out your credit card whenever you have to make a purchase might lead to overspending.

But from a security standpoint, paying with a credit card is actually the better move.

By the end of this year, credit and debit card fraud is expected to reach $33B globally. While a criminal can steal your credit card just as easily as they can steal your debit card, the consequences are different.

Debit cards are not as well protected as credit cards. And since your debit card is linked to your bank account, anyone with your debit card information can have access to all your funds.

Whereas credit card transactions usually don’t get billed until later, the damages are handled differently. If you’re a victim of debit card theft, depending on your situation, you can be held liable for significant losses, especially if you don’t report the fraud fast enough.

According to the FTC and the Consumer Financial Protection Bureau, here’s what happens if your debit card is stolen or compromised:

• If you report the card as lost or stolen within two business days, you won’t be responsible for more than $50 of unauthorized transactions.
• If an unauthorized transaction appears on your statement (but your card or PIN has not been lost or stolen), under federal law you will not be liable for the debit if you report it within 60 days after your account statement is sent to you.
• If someone uses your physical ATM or debit card without your permission (meaning it was stolen) and you report the fraudulent charges within 60 days after your statement is mailed to you, you could lose as much as, but no more than, $500.
• If someone uses your ATM or debit card without your permission and you don’t report it within 60 days after your statement is mailed to you, the potential damage is unlimited. You could lose all the money in that account, the unused portion of your maximum line of credit established for overdrafts, and even more.

And here’s what happens if your credit card or credit card number is stolen:

• If your credit card number is stolen, not the physical card, you are not responsible for unauthorized charges under federal law.
• If the actual card is stolen, you are liable for no more than $50 in authorized charges — as long as you report it to your card issuer. Some issuers won’t even charge you the $50.

The difference is pretty shocking and you’re probably wondering when is a good time to use my debit card? Surprisingly, it’s safer to carry cash with you than it is to use your debit card in most situations.

If your cash gets stolen, you lose whatever amount you were carrying. If your debit card goes missing, well, I don’t have to tell you twice…

But leaving your debit card at home is not always an option. Sometimes you’re stuck having to use a debit card.

So where should you absolutely AVOID using a debit card?

These are the top 10 places you want to leave your debit card in your wallet:

1. Online Shopping

Don’t use a debit card online. If you have a problem with a payment and your card gets hijacked, you risk losing a large chunk of your money.

2. Big-ticket items

Whenever you’re making a big purchase, try to put it on a credit card if you have the room. Why? Credit cards offer dispute rights in case something goes wrong with the purchase.

3. Giving a deposit

Anytime you’re renting tools or need to put down a cash deposit for something, always use your credit card. If something goes wrong or the merchant decides they’re going to keep your deposit when they shouldn’t, you have no way of fighting if you pay by debit card.

4. Restaurants

Many restaurants will bring a payment machine to your table, but there are still places that will take your card to the back and run the payment through.

You never know if a restaurant is going to scam you so it’s best to keep your debit card in plain sight.

5. New stores

If a new store opens up in your neighborhood, avoid using a debit card for the first few times you shop there. You might not know the quality of the goods you’re purchasing and if there’s any chance you have to return something, a credit card will provide you with more rights as a consumer.

6. Items Being Delivered Later

Ordering furniture or large televisions that you pay for in store and will be delivered later are prime suspects for fraud. It’s best to use a credit card for the same consumer protection reasons mentioned above.

7. Recurring Payments

There’s no doubt getting billed automatically makes life easier but what happens when you want to cancel a membership and the payments keep coming out? Never link your bank account to a recurring payment, always use a credit card.

8. Future Travel

Trips can be expensive so it’s best to use a credit card and give yourself a longer window to pay down the balance. If you use your debit card, you’re out of the total balance right away.

9. Hotels

Most hotels will place holds on your card to cover unexpected costs or expenses that don’t immediately show up on your itemized bill. Always use a credit card for this in case charges show up that shouldn’t be there.

10. ATMs and Pay-at-the-Pump Gas Stations

Lastly, avoid using your debit card at non bank-affiliated ATMs and pay-at-the pump gas stations. These places are usually poorly monitored so criminals prey on people in these environments.

So before you go whipping out your debit card, keep these 10 spots in mind.

To a richer life,

— Nilus Mattive
Editor, The Rich Life Roadmap

The post 10 Places You Should NEVER Use Your Debit Card appeared first on Daily Reckoning.

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