Today, more than ever, consumers are using debit cards; as a matter of fact, they are swiftly becoming the payment of choice over checks (so 1900's), cash, or credit cards. They have the advantages of credit cards as you don't have to write checks all over town (increasing your exposure to identity theft) or carry a ton of cash. They also have the advantage over credit cards in that they won't put you into debt, unless, you overdraw your checking account and incur overdraft fees.
However, it may not always be a great idea to use your debit card. Here are a few situations:
Handing Your Card To Someone Who Takes It Away
This occurs in restaurants and bars. You don't know what the person is doing with your card when they're gone. They can take the information on your card and drain your account. The same is true with a credit card as well. Some identity theft experts suggest using only cash in these situations. You may want to consider a virtual number if your credit card offers one. (It's used only one time and you request one each time you use your card.)
This would include deposits for renting a car or when a hotel asks you for a card at check-in; if you use a debit card, they will actually take the deposit out of your checking account that day, whereas with a credit card, the amount is not actually charged. Of course, with the debit card, the security amount is credited to your balance when you return the car.
Whether it be our health club or the newspaper, it's a great idea to pay the monthly fee automatically so we don't have to worry about sending the money ourselves. By using a credit card, we also don't have to worry about not having the money in our checking account to cover the expense, although it should be in there, as nothing should be charged to your credit card without the cash to support it. However, with a debit card, if the service is in dispute, it can be rather difficult to get your money back. If you have a credit card on file to make the payment, you can always dispute the charge with your credit card company.
Choosing The Credit Option
This is where you use your debit card, but they don't charge your account until later. Unless you remember that the charge is coming later, you may forget it and overcharge your checking account, incurring those nasty overdraft fees.
Online Purchases and WI-FI Hot Spots
Many WI-FI hot spots are unsecured wireless connections and anyone can steal your information. As mentioned earler, if someone steals your information they can drain your account very quickly and it could take a long time to get your money back.
What is your preferred method of payment?