Debit cards have different protections and uses. Sometimes they're not the best choice. Sometimes reaching for your wallet is like a multiple choice test: How do you really want to pay?
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While credit cards and debit cards may look almost identical, not all plastic is the same."It's important that consumers understand the difference between a debit card and a credit card," says John Breyault, director of the Fraud Center for the National Consumers League, a Washington, D.C.-based advocacy group. "There's a difference in how the transactions are processed and the protections offered to consumers when they use them.
"Here are 10 places and situations where it can pay to leave that debit card in your wallet:
1. Online
"You don't use a debit card online," says Susan Tiffany, director of consumer periodicals for the Credit Union National Association. Since the debit card links directly to a checking account, "you have potential vulnerability there," she says. She also includes phone orders in this category.
2. Big-Ticket Items
With a big ticket item, a credit card is safer, says Chi Chi Wu, staff attorney with the National Consumer Law Center. A credit card offers dispute rights if something goes wrong with the merchandise or the purchase, she says.Popular Stories on Yahoo!: • 7 Things Never to Say to Your Boss• The Richest States in America• Mixed Message on Immigration Fuels AngerMore from Yahoo! Finance "With a debit card, you have fewer protections," she says.
3. Deposit Required
"This is where you want to use a credit card instead of a debit," says Garuccio, spokesman for the national trade group American Bankers Association.That way, the store has its security deposit, and you still have access to all of the money in your bank account. With any luck, you'll never actually have to part with a dollar.
4. Restaurants
The "conventional advice of 'don't let the card out of your sight' -- that's just not practical," says Tiffany. The other problem with using a debit card at restaurants: Some establishments will approve the card for more than your purchase amount because, presumably, you intend to leave a tip. So the amount of money frozen for the transaction could be quite a bit more than the amount of your tab. And it could be a few days before you get the cash back in your account.
5. You're a New Customer
Online or in the real world, if you're a first-time customer in a store, skip the debit card the first couple of times you buy, says Breyault.
6. Buy Now, Take Delivery Later
Buying now but taking delivery days or weeks from now? A credit card offers dispute rights that a debit card typically does not.
7. Recurring Payments
We've all heard the urban legend about the gym that won't stop billing an ex-member's credit card. Now imagine the charges aren't going onto your card, but instead coming right out of your bank account. Another reason not to use the debit card for recurring charges: your own memory and math skills. Forget to deduct that automatic bill payment from your checkbook one month, and you could either face fees or embarrassment.
8. Future Travel
Book your travel with a check card, and "they debit it immediately," says Foley. So if you're buying travel that you won't use for six months or making a reservation for a few weeks from now, you'll be out the money immediately.
9. Gas Stations and Hotels
This one depends on the individual business. Some gas stations and hotels will place holds to cover customers who may leave without settling the entire bill.
10. Checkouts or ATMs That Look 'Off'
Criminals are getting better with skimmers and planting them in places you'd never suspect -- like ATM machines on bank property, says Foley. So take a good look at the machine or card reader the next time you use an ATM or self-check lane, she advises. Does the machine fit together well or does something look off, different or like it doesn't quite belong? Says Foley, "Make sure it doesn't look like it's been tampered with.
"This article was written by Dana Dratch
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