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7 Times You Shouldn’t Use a Debit Card for Payment

Hint: It could put your bank account at greater risk.

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Swiping a debit card is an easy way to make a purchase when you don’t have cash. But there are plenty of reasons you should be wary of using them, consumer experts say. “They’re good for routine transactions and certainly if you’re looking to keep your spending within limits, they do provide you a little bit better way to manage that,” says Leslie Tayne, a financial attorney and author of Life and Debt: A Fresh Approach Toward Achieving Financial Wellness. “But for major purchases, credit cards are usually a better way to go because they will offer you more protection.”

The convenience of using debit cards may be outweighed by the risk of fraud. “I think it’s always a bad idea to use your debit card to make a purchase,” says Kimberly Palmer, the personal finance expert at NerdWallet. “The only reason you should use your debit card is to withdraw money from an ATM or a bank.” That said, there are some times you should never pay with cash, either.

On top of that, by using a debit card, you’re missing out on the rewards you can earn from buying items with credit cards. So here’s when you definitely don’t want to use a debit card:

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When staying at a hotel

Debit cards are linked to bank accounts. When you use a debit card at hotels, employees will often put a hold on the amount of time that you’re staying, plus some extra money in case you have other charges. “That could definitely impact your ability to use the account for other expenses,” Tayne says.

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When renting a car

Car rental services also place a hold on money in your account when you use a debit card. So you won’t have access to those funds while you’re using the vehicle, Tayne notes. That’s not a problem if you have plenty of money in the account, but it could lead to bounced checks and overdrafts if you don’t. Learn the everyday habits of debt-free people.

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When traveling abroad

People traveling overseas are often buying things in unfamiliar places. That’s why Tayne recommended to her daughter that she get a separate debit card tied to a bank account with only a limited amount of money in it. “In case it somehow gets hacked, it’s not tied to the majority of her money,” Tayne says. “Because a debit card does tie right into money, versus a credit card that doesn’t tie right into your usable cash.” That said, here are 10 times you should never use your credit card to make a purchase.

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When shopping online

Using your debit card to buy from websites can also put you more at risk. And if you discover a fraudulent charge, it can be harder to dispute when the payment is made with a debit card instead of a credit card. “Even though banks still have protections in place for you with your debit card, a fraudster could empty out your bank account before you even realize that your debit card has been compromised,” Palmer says. “And that’s a huge risk for people because people use their bank accounts to pay for all kinds of things, from utility bills to mortgages and rent.”

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When you want to earn points

“If you use a credit card, you can earn rewards on all your purchases,” Palmer says. “That’s not the case with a debit card.” So if you’re looking to earn miles and rewards, get a credit card with those perks. Planning a trip? Here’s how to use credit card rewards to upgrade your vacation

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When you want to build your credit

Debit card purchases also don’t count toward your credit score. When you buy things on your credit card and pay off your balance every month, however, that helps build your credit. Learn more about how to improve your credit score.

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Arab woman and automated teller machine . Woman withdrawing money or checking account balance.Kdonmuang/Shutterstock

When you want to keep tabs on your budget

While opinions may differ on this approach, it may be easier to organize your budget using a credit card because you can see all your daily expenditures in one place. “For me, it’s easy to analyze my statements instead of pulling out my bank account and trying to do it that way,” Palmer says. Now that you know when you shouldn’t use debit cards, learn about all the things credit card companies know about you.


Jen McCaffery
Jen McCaffery is an associate editor for Reader’s Digest. Her work has appeared in the New York Times, Prevention, Rhode Island Monthly, and other publications and websites. When she’s not writing or editing, she’s growing veggies or trying to figure out the way home from assorted trails.