Frisco Mortgage News

You go to the checkout line and I’m sure the sales clerk has asked you, “debit or credit?”

Using a credit card has its advantages over using a debit card. One is that if you have a “rewards” card, you built up points for future use. Another is that it’s easier to “dispute” a credit card charge and have it removed from your bill — versus a debit card where the money is already taken out of your account.

However, I recently read an article where the author stated that there are five things that you should NEVER put on your debit card, and I wanted to share that with you.

1. Online Purchases: There is a huge potential for fraud with both debit and credit cards. While banks usually offer $50 card protection with both debit and credit cards, using a debit card could leave you with no cash in your account until the fraud issues are worked out with your bank. If the same issue happens with a credit card, a new one can usually be mailed to you overnight, which doesn’t always happen if your debit card is compromised.
2. Gas Purchases: Many gas stations offer lower prices if you use your debit card, but using a debit card can result in a short-term “hold” of $50 to $100 that can last up to a few hours (or overnight). If you carry a low balance in your checking/savings account, the “hold” could result in a “overdraft” notice and additional bank fees.
3. Hotels: Hotels are like gas stations—they usually place a “hold” on your debit card of $100 to $200 for “incidentals.” Sometimes it’s applied towards the payment of your hotel room, even if you initially reserved it with a credit card. You may have the same problem using your debit card for gas purchases – it may result in overdraft fees.
4. Large Purchases: Let’s say you bought a $1,500 TV using your debit card. You took it home and found the TV to be defective. You may be forced to wait until the matter is resolved with the merchant before you get your money refunded. To make matters worse, if the problem can’t be resolved between you and the merchant, you may be stuck with the defective item.
5. Unfamiliar Places: Never use a debit card at an establishment that looks/feels questionable. This also includes ATMs that look strange or are hidden in obscure places.

Have you ever had problems getting your money back after using a debit card?