Why paying with a debit isn’t always the safest – it could cost you time and money.

Paying with your debit card might seem like a responsible move right? You can only spend what you have and the money leaves your account the moment you make a transaction.

After all, getting in the habit of whipping out your credit card whenever you have to make a purchase might lead to overspending – something I’m somewhat guilty of – but I never spend more than I have. I use credit cards like I would a debit card and pay it off immediately (even before it posts).

But from a security standpoint, paying with a credit card is actually the better financial move mitigating the risk and moving it from you to the banks.

By the end of 2019, credit and debit card fraud is expected to reach $33B globally. While a criminal can steal your credit card just as easily as they can steal your debit card, the consequences are different to say the least.

Debit cards are not as well protected as credit cards. And since your debit card is directly linked to your bank account, anyone with your debit card information can have access to all your funds and empty you out.

Whereas credit card transactions usually don’t get billed until later, the damages are handled differently. If you’re a victim of debit card theft, depending on your situation, you can be held liable for significant losses, especially if you don’t report the fraud fast enough – maybe set up text alerts/transaction alerts and(or) withdrawal notifications so that you’re not caught off guard.

According to the Federal Trade Comission and the Consumer Financial Protection Bureau, here’s what happens if your debit card is stolen or compromised:

• If you report the card as lost or stolen within two business days, you won’t be responsible for more than $50 of unauthorized transactions.
• If an unauthorized transaction appears on your statement (but your card or PIN has not been lost or stolen), under federal law you will not be liable for the debit if you report it within 60 days after your account statement is sent to you.
• If someone uses your physical ATM or debit card without your permission (meaning it was stolen) and you report the fraudulent charges within 60 days after your statement is mailed to you, you could lose as much as, but no more than, $500.
• If someone uses your ATM or debit card without your permission and you don’t report it within 60 days after your statement is mailed to you, the potential damage is unlimited. You could lose all the money in that account, the unused portion of your maximum line of credit established for overdrafts, and even more.

These pointers in mind, always report a false charge/transaction the moment you are alerted to it. It’s better to block/freeze a lost card (maybe left at a restaurant or gas station) than wait to go back and find it as the damages may have already been done.

And here’s what happens if your credit card or credit card number is stolen:

• If your credit card number is stolen, not the physical card, you are not responsible for unauthorized charges under federal law.
• If the actual card is stolen, you are liable for no more than $50 in authorized charges — as long as you report it to your card issuer. Some issuers won’t even charge you the $50.

In my personal experience, I’ve had four cases of credit card fraud where-in I received alerts of transactions in other States/cities while I was in physical possession of the card. I immediately alerted my banks and they not only blocked the cards, but began their financial review process.

Ultimately, I had evidence of being in a certain place due to other transactions I made that I was in the clear. The banks did question my older transactions that they felt were unusual and I was able to back those up – making me a reliable trustworthy user.

The difference is pretty shocking and you’re probably wondering when is a good time to use my debit card? Surprisingly, it’s safer to carry cash with you than it is to use your debit card in most situations.

If your cash gets stolen, you lose whatever amount you were carrying. If your debit card goes missing, well, I don’t have to tell you the trouble you landed yourself in. I always carry my credit cards as well as some cash. If I carry a debit card because, I carry one with just enough money in the account for emergency withdrawals – minimizing my risk exposure.

But leaving your debit card at home is not always an option. Sometimes you’re stuck having to use a debit card and these are 10 places you want to leave your debit card in your wallet:

1. Online Shopping

Don’t use a debit card online. If you have a problem with a payment and your card gets hijacked, you risk losing a large chunk of your money. Additionally, if you were charged twice due to error, getting that money refunded can be a major hassle compared to a credit card.

2. Big-ticket items

Whenever you’re making a big purchase, try to put it on a credit card if you have the room. Why? Credit cards offer dispute rights in case something goes wrong with the purchase. Additionally, if it’s an electronic goods purchase such as a laptop or phone and something were to happen to it (lost/stolen), your rear-end is protected thanks to some credit card purchase protections.

3. Giving a deposit

Anytime you’re renting tools or need to put down a cash deposit for something, always use your credit card. If something goes wrong or the merchant decides they’re going to keep your deposit when they shouldn’t, you have no way of fighting if you pay by debit card.

4. Restaurants

Many restaurants will bring a payment machine to your table, but there are still places that will take your card to the back and run the payment through.

You never know if a restaurant is going to scam you so it’s best to keep your debit card in plain sight. It’s very easy to swipe off and mirror a card in the modern world and I always recommend transactions be made in front of you.

5. New stores

If a new store opens up in your neighborhood, avoid using a debit card for the first few times you shop there. You might not know the quality of the goods you’re purchasing and if there’s any chance you have to return something, a credit card will provide you with more rights as a consumer.

6. Items Being Delivered Later

Ordering furniture or large televisions that you pay for in store and will be delivered later are prime suspects for fraud. It’s best to use a credit card for the same consumer protection reasons mentioned above.

7. Recurring Payments

There’s no doubt getting billed automatically makes life easier but what happens when you want to cancel a membership and the payments keep coming out? Never link your bank account to a recurring payment, always use a credit card as you can dispute these charges as fraudulent and the bank takes care of the rest.

8. Future Travel

Trips can be expensive so it’s best to use a credit card and give yourself a longer window to pay down the balance. If you use your debit card, you’re out of the total balance right away. Worse still is if you fell sick and were unable to make the trip. Many credit cards have travel benefits that cover such incidentals and may cover your potential loses upto 100%.

9. Hotels

Most hotels will place holds on your card to cover unexpected costs or expenses that don’t immediately show up on your itemized bill. Always use a credit card for this in case charges show up that shouldn’t be there.

10. 3rd Party ATMs and Pay-at-the-Pump Gas Stations

Lastly, avoid using your debit card at non bank-affiliated ATMs and pay-at-the pump gas stations. These places are usually poorly monitored so criminals prey on people in these environments. When entering a PIN/ZIP CODE always cover the number pad to avoid micro-cameras recording your strokes.

So the next time you decide to use your debit card, be mindful and think, is there a benefit I’m letting go off or over-exposing myself? Chances are, you are.

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