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The holiday season is upon us, whether we want to admit it or not. Thanksgiving is less than two weeks away (goodness gracious!) and Christmas is not far behind. Of course, countless people will be using their debit cards to make holiday purchases.
So when Go Banking Rates came out with the list of the most dangerous places to use your debit card, I had to find out where these places might be. Knowing ahead of time could prevent costly mistakes that could land you in financial hot water if your card was stolen or compromised in some way. Here’s what made the list.
Here’s what made the list of the most dangerous places to use your debit card this holiday season.
Most Dangerous Places to Use Your Debit Card
And they are chock full of dangers…
Yes, it’s nice to know you’re not going into debt by using your debit card to make purchases this holiday season, but the risks are much greater if you do decide to take the chance and use a debit card.
Debit cards are inferior in several ways, particularly if your card is compromised and the money has already left your account. You’ll have to fight tooth and nail to get it back, unlike credit cards which provide the protection of the credit card company.
You’ll need to file a report for the false charges, but the money won’t leave your personal account.
Unlike credit cards, which give you 60 days to report fraudulent activity and file a claim, debit cards allow for two days to report a problem. That’s not much time considering the vast majority of people never look at their bank activity by going on-line and checking their statements.
You could be out hundreds if not thousands of dollars.
Lastly, places like hotels and gas stations typically put a hold on the money in your account when you pay by debit. If you’ve forgotten about this and you make additional purchases, you could easily overdraw your account creating an additional problem.
Here’s the list that will have you thinking twice about using a debit card to make a purchase.
No surprise here. According to the report, it’s easy for hackers to compromise online sites than it is to get information from brick and mortar stores. Plus, if you make a purchase with a credit card, you’ll have greater protection if the gift never shows up at your door.
2. Paying at The Pump
The risk of a skimming device is huge when you pay at the pump. A better alternative if you must pay with a debit card is to go inside to complete the transaction. Better yet, when making your holiday travel plans, budget your gas needs and carry cash.
3. At The Supermarket
We’ve all heard about the scam rings where people dressed up like the folks who service the debit machines come in and put skimmers on the devices instead. Hundreds of thousands of people’s information are comprised every year by skimming devices. Again, if you’re budgeting/creating your spending plan each month, you can quickly convert the amount into cash and use cash for your grocery purchases.
4. At Restaurants
The turnover at restaurants is so high that it isn’t worth risking your debit card number to some person you don’t know and shouldn’t trust. This isn’t to say all waiters and waitresses are dishonest, to the contrary – but you can’t tell the difference between the thieves and the good guys, so why risk it?
5. Renting A Car
When you rent a car, its standard practice and perfectly legal for the car rental company to run a credit report on you. The problem? It drastically messes with your credit score. When renting a car this holiday, it’s preferable to use a credit card.
6. Booking Travel
If you’re booking travel that will occur months down the road, you’ll be better protected by using a credit card vs. a debit card. If the travel agency goes belly up and closes their doors, you’ll have no recourse if you use your debit card, but you will have protection if you use a credit card.
7. Buying Appliances
If you’re ordering furniture or appliances online and have to wait for delivery, you should only pay by credit card. Again, if the company closes you’re out of luck. And if you don’t have your delivery within 50 days, you can dispute the charges. Remember, you only have 60 days to dispute any false charges on a credit card.
8. Independent ATM
Not the ones you find at your bank, which are typically carefully and heavily monitored, but rather those ATM’s you find in convenience stores and the like. There’s a higher likelihood of a skimmer showing up on one of those ATMs than at your bank.
9. When Setting Up Automatic Payments
We’ve all done it. Set up an automatic payment with our gym, utility company, cable company and the like. The problem becomes when your contract has ended, and they continue to take money from your account each month. That is illegal, and you can get it to stop by citing what’s called “Regulation E” and using writing your bank a letter telling them you no longer authorize the payments. So if you buy you’ve loved one a gym membership for Christmas, don’t put it on your debit card.
10. When A Deposit is Required
If you’ve got to rent a piece of equipment at say Home Depot, don’t use your debit card. Use your credit card for the deposit. You’ll be better protected.
I’m not a proponent of using credit cards, but sometimes it might make more sense to put a purchase on a credit card.
What you should be doing is budgeting ahead of time for the purchase and paying it in full as soon as the item has hit your credit card.
Don’t wait until the bill comes in, do it when you get home from the store so you don’t risk spending the money on something else.
You can have a safe holiday by using these common sense approaches when to use a debit card and when it’ll be a problem.