A debit card can help you avoid debt, since you’re pulling money directly from a linked account. However, sometimes it’s better to use a credit card instead, paying the balance in full each month so you don’t rack up interest charges. Along with fewer protections against fraud and a bigger risk of identity theft, debit cards carry more risk when used at certain businesses.
Remember, debit card users aren’t held liable if they report a lost or stolen card before unauthorized charges are made, but are liable for up to $50 of unauthorized or fraudulent charges if the issue is reported within two days, according to the Federal Trade Commission (FTC). If it’s reported within 60 days, the liability goes up to $500. After 60 days, your debit account could be drained and it could still be your responsibility.
Skimmers can steal debit card information from a gas pump’s card scanner. Fraudsters hack the pump with skimming machines that fit over the card reader and steal your data and PIN. Other types of skimmers fit inside the card reader, or are wiretapped with cable running between the card reader and a main board.
Be careful when swiping at an ATM you don’t normally use, such as independent ATMs that aren’t tied to your bank. Even bank ATMs can be hacked in the same way gas pumps are.
If your debit card information is stolen online, the checking account it’s linked to could be drained quickly. Check the news almost any day of the week and you’ll see data breaches being reported. If your data is stolen, a credit card is a lot easier for reimbursement purposes than a debit card, especially if you don’t immediately realize your card is missing.
With all of these places to avoid, don’t feel like you can’t use your debit card at all. Some swiping machines let you use them as a credit card and require a password. Or you can always use cash instead.