When buying a product or service, many people use their debit card to make the payment. But before you use your debit card, stop and think whether it is the best way of making that particular payment.
Debit cards and credit cards are quite different and they have their own advantages and disadvantages. There are different levels of protection provided in these cards – the most important difference being that a debit card gives direct access to your checking account, which means it is riskier.
If you don’t keep track of your debit card usage, you can encounter various problems, such as fees for low balance, bounced checks, and failure of transactions because of non-availability of funds. Moreover, it’s difficult to get the money back in your account once it has been wrongly charged.
You should avoid using a debit card to make online payments. This is even more important if you are doing business with that site for the first time. There is a risk of someone hijacking your debit card online and the card can then be easily used for online purchases just by getting some basic information such as the card number, expiry date and CVV number. Use your debit card only when you absolutely trust the company.
Avoid using a debit card for high value goods or for those which would be delivered on a later date. A credit card would give you the right to make claims if there is an obvious deficiency on part of the merchant, but this is not the case with a debit card.
If you are making a payment in a restaurant, the debit card would be out of your sight due to which there is a high probability of misuse. The card’s magnetic strip can be copied or the details could be stolen – in either case, you would end up losing money.
A credit card is a better option for security deposits as well. You would not be paying money from your account while the other person gets the necessary security. Similarly, in case of hotels, use a credit card instead of a debit card for the holds so that the money is not withdrawn from your account.
Other than these precautions, you should also make sure that your debit card is not left lying around. If you have lost your card or it has been stolen, then immediately call your bank to block the card and issue a new one.