5 Places You Should Never Use a Debit Card

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Debit cards are a great way to help you avoid debt. However, here’s where you might want to think twice before using one. [[{“value”:”

Debit cards have changed the way we pay for things. Not only is a debit card more convenient than carrying cash, but it can also help you avoid debt.

However, debit cards are not always the best way to pay for things. Debit card transactions are processed differently than credit cards and don’t provide the same level of protection.

If your credit card number is stolen (as opposed to the card itself), you’re not responsible for any unauthorized transactions, according to the Federal Trade Commission. Even if your physical card is stolen, the most you can be out for unauthorized charges is $50.

How much it will cost you if someone uses your debit card depends on how long it takes you to notice the fraud.

As long as you report that your card is missing before someone else uses it for an unauthorized debit card purchase, you’re not responsible for anything they spend.If you report unauthorized charges within two days, your liability is limited to $50. If you don’t make a report until the third day, you could be liable for up to $500 in unauthorized charges. If you don’t realize the card is missing for 60 days, you may be responsible for all transactions made during that time.

The next time you decide whether to pay with a debit or credit card, you may want to consider which payment method would be the safest bet. Here are five instances when you should think twice about pulling out your debit card to pay.

1. When checking into a hotel

When you check into a hotel, the final amount you will owe is not fixed. It’s not until you’re checking out that restaurant charges, mini-bar charges, and other fees are added to your bill.

For that reason, hotels place a hold on a specific dollar amount above the room rate. That means if you use your debit card, you will temporarily be unable to access the funds on hold. Unless your checking account is flush with cash, you may want to pay with a credit card instead.

2. When dining in a restaurant

Like hotels, a restaurant may place a hold on a higher dollar amount than the cost of your meal under the assumption that you’ll add a tip to the bill. It could take several days for the amount held by the restaurant to fall off.

Another factor to consider when paying for a restaurant meal with a debit card is that if the servers take the card away from the table to be processed, it’s out of sight. Once it’s out of your line of sight, you don’t know if someone is stealing the card number to use later.

3. At the gas pump

You’re instructed to insert your debit card into a gas pump before pumping gas. Once you insert that card, you’re giving the gas station permission to withdraw money from your bank account. However, since the station doesn’t know how much gas you’ll buy, it puts a hold on a high enough amount to protect itself.

For example, even if you only end up putting $25 of gas into your vehicle, you could have a hold on your debit card of $75. That’s $50 extra you cannot access until the hold ends.

Plus, thieves love gas station pumps. It doesn’t take a sophisticated mastermind to install a small device on a pump that will capture debit and credit card information. They may even install a miniature camera that lets them see your PIN as it’s entered.

As mentioned earlier, depending on how long it takes you to realize that someone has accessed your card, unauthorized charges could cost you more when you use a debit card. If you want to use a debit card for gas, pay a specific amount inside the station before pumping.

4. When shopping online

Crooks can access your debit card information in many ways when you’re shopping online. They may pose as fake stores, offering deals too good to be true. They could hack into the e-commerce site you’re visiting, or you may have a virus on your computer that allows bad actors to capture your information as it’s entered.

Although you can report the fraudulent activity, the money taken from your account may not be available while your claim is being investigated. Using a credit card to shop online is safer, and there are plenty of great rewards credit cards for doing so.

5. In airports

Think about your average trip through an airport. Everything is rushed, and you’re typically trying to do more than one thing simultaneously. More importantly, you’re constantly pulling the card out to pay for things like parking, checked bags, food, and reading material.

Airports are a ripe hunting ground for thieves who count on travelers too distracted to notice their card or card number being stolen.

After suggesting that you use a credit card to make some purchases, it’s important to say this: Your smartest financial move is always to pay off your credit cards in full each month. Paying a high interest rate is a drain on your budget and an unnecessary expense.

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The Ascent does not cover all offers on the market. Editorial content from The Ascent is separate from The Motley Fool editorial content and is created by a different analyst team.Dana George has no position in any of the stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy.

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