Debit cards are convenient, but they have their drawbacks

No doubt a debit card is a lifesaver when you don’t have cash. Unlike using the ATM, where you must withdraw a certain amount in $20 increments, with a debit card you can take out exactly what you need.

But despite the convenience of debit cards, there are times when it’s best to keep them in your wallet.

Shopping online

“When shopping online, it’s easier for scammers to take your information," says Leslie Tayne, a debt resolution attorney with the Tayne Law Group in Melville. "Credit cards typically have better protections against fraud than debit cards. Many credit cards offer zero-fraud liability, meaning you’re not responsible for any fraudulent charges, if reported in a timely manner.” 

If a credit card doesn’t have zero-fraud liability, federal law prohibits personal liability of more than $50. This applies for debit cards too, but only if you report the fraud within two days.

Traveling

Hotels often put a certain amount of money on hold for payments or charges made during your stay. As a result, you won’t have access to that money. Depending on your bank, it can take a few days for the funds to be available.

“Credit cards often give rewards for hotel and flight purchases. It's silly to use a debit card instead of a credit card that gives you those rewards,” says Patricia Russell, a certified financial planner with FinanceMarvel.com.

At the pump

Gas stations are risky places for debit cards. Crooks have been known to install card skimmers on the pumps. Says Nathan Grant, credit industry analyst for CreditCardInsider.com, “When criminals fraudulently use your credit card, they’re spending your credit card issuer’s money, but when they use your debit card, it’s coming from your checking account. Use cash or a credit card.”