8 Places You Should Never Use A Debit Card

If you’re trying to get out of debt and avoid overspending, you might be one of the 60% of Americans who regularly use a debit card.

Debit cards can help you break the habit of credit card overspending and are more convenient than always having to carry cash, but there are some downsides.

Debit cards are linked to your bank account directly and because of this link, it is easier for criminals to steal money from you and you are the one who must notice the fraud and start the clean-up process.

Debit card dispute limits

There are some limits on debit card losses mandated by the federal government. If you report a card lost or stolen within two business days of the theft, then you are only liable for $50, and if you report between 2–60 days after it is lost or stolen, your loss is limited to $500.

But if you don’t notice the theft and more than 60 days pass, then you cannot get your money back, and the loss is entirely yours.

Even though losses can be limited on debit cards, who wants the hassle?

If your card is used fraudulently, the money is out of your account while you try to resolve the situation, and that money is what you need for living and paying bills.

So instead learn the top places you should avoid using your debit card, so you don’t have money stolen from your account.

An ounce of prevention is worth a pound of cure. – Ben Franklin

1. ATMs

Skimming is a tactic where people put false card readers onto existing swipe machines that can steal your debit card information. The skimming device saves your card information for the thieves to use when they want.

Skimming devices are usually installed where there are no security cameras to see the thieves. If you go to these places, use cash or a credit card instead.

ATMs at banks should be secure, but PC Magazine advises that you check for signs of tampering, misaligned parts, or a part that is a different color than what it should be.

Stand-alone ATMs are much riskier since they don’t have the bank’s security watching over them. Avoid independent ATMs at all costs with your debit card.

2. Gas Stations

Gas pumps that are far from the gas station and not monitored by cameras can easily have skimming devices installed.

Another reason to avoid using your debit card at the gas station is because stations will put a hold on your account between $1-$125 dollars.

Why do they do this? Gas stations are liable for selling you the gas, so they don’t want to find out you don’t have enough money in your bank account. They cover themselves by places these holds on your account, but the hold can last from a few minutes up to three days.

3. Restaurants

You interact with so many strangers in a day; you might forget you don’t have to automatically trust people. Avoid using your debit card with strangers when possible.

According to the Houston Chronicle, ”casual dining restaurants average a 44 percent turnover rate.” This means there are a lot of employees not planning to stay and work for long. It is very simple for restaurant workers to copy your card numbers while processing your check.

4. Buying Online

Whether it is Ebay or Etsy, buying online with a debit card is risky because you don’t have an easy process for a refund if you never receive your item or if it comes damaged. With a credit card, you can start a chargeback request very simply.

Remember when buying from personal sellers that they will get all your card information and don’t automatically trust them with access to your bank account.

5. Car Rental

Credit cards come with included rental car insurance while most debit cards do not.

If you want to rent a car with your debit card, double check for rental car insurance, and also realize that like gas stations, car rental locations will put a large hold on your bank account to ensure they get paid for the rental and any damage that might occur.

6. Automatic Drafts

Paying bills automatically is a big convenience, but if you were to forget a once yearly charge and go into overdraft, it could lead to lots of fees costing you much more than you expected.

7. Furniture

This one is tough because you can get a better deal on furniture if you pay with cash. But you run the risk of losing your money if the furniture store goes out of business while you’re waiting the typical 4–8 weeks for the delivery.

And what if the furniture gets delivered and has scratches, dents, or other problems? It’s easier to get the problem fixed when you can hold the potential of disputing a charge over the head of a seller. Not so if you’re paying in cash or with a debit card – that money is already gone.

8. Travel

Be aware that travel is never guaranteed. The company you booked with may go broke, or riots may break out where you were scheduled to visit.

Katie booked a babymoon before the twins were scheduled to arrive. Then bed rest was mandated three months before their due dates. Our credit card company and travel agent helped us get our money back, and we didn’t have to worry about it. It would have been harder to get back if the money had already gone from our checking account.

Be careful with your debit cards and keep your bank account safe. The best thing to do is to follow these tips and limit the amount of money you keep in your checking account.

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