Debit or Credit Cards?

Jun 2022

Today, most of us make purchases, whether on-line or in-person, using a credit or debit card.  Vendors make it very easy to tap, swipe or just enter our information online, without even verifying who we are.  Some of us rarely use cash today; from a $2 expense to $500-plus, we use a card of some type.

With fraudulent activity on the rise, it is more important than ever to check your account activity and use your cards wisely to avoid scams and headaches with credit card companies and especially, your bank.

I recently spoke with a client who was out of town and used his debit card for a few purchases.  He happened to check his activity later that evening and noticed four transactions within minutes of each other that he immediately knew were fraudulent.  He attempted to contact the number on his debit card (a very large banking institution), and to his surprise and frustration, it took many calls and weeks to receive reimbursement.  Thankfully, none of his regular payments bounced in his checking account.  Due to the poor customer service and all the headaches to receive a resolution, he changed banks immediately.  The client also learned a valuable lesson:  use credit cards to make purchases.

As a best practice, you should use your credit card whenever possible.  Credit card companies are timelier and more efficient in crediting your account for the fraudulent activity, and in issuing you a new card.

Debit cards should be used only to withdraw cash at an ATM, preferably at a bank.  All too often, when a debit card is compromised, you could not only be out of hundreds or even thousands of dollars, but any outstanding bill payments may bounce until the bank puts the cash back in your account.  Now, you not only have to deal with the bank, but also all the vendors who did not receive payment and are now charging you late fees – what a headache!

Adopting the following good habits will help keep fraudsters and thieves away from your debit and credit card accounts:

  • Use credit cards, and not debit cards to make purchases.
  • Using your digital wallet with your credit card information on your mobile device is even more secure, as your data is encrypted.
  • Only use your debit card for emergencies, and preferably at a bank ATM machine.
  • Check your bank and credit card activity on a regular basis, so you can spot unauthorized activity right away.
  • Set up daily notifications and alerts with your bank and credit cards.
  • When shopping online, use your credit card; make sure you are on a secure site (“https” should start the website address, and should have a padlock icon in the address bar as well); and don’t shop in unsecured areas where public wi-fi is being used.

Being more vigilant when using credit and debit cards is a best practice we should all follow.

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