6 Places Never to Use a Debit Card

credit card at gas stationCredit or debit? Although both cards look the same, they offer different protections.

Under federal law, if your credit card is used to make unauthorized charges after it is lost or stolen, you’re liable for only $50 - no matter the amount and with no time restrictions to report the fraud. And many issuers won’t even charge the $50 for valued customers.

But with a debit card, you have just two business days to report an unauthorized loss or money transfer, or you could be liable for up to $500. Wait more than 60 calendar days after your statement is mailed and you could be responsible for all money pilfered from its connected account.

>> 10 Ways to Protect Yourself from Identity Theft

Although debit cards offer no-interest savings - which may factor for some plastic users - there are six places where you should never use them.

Gas Stations

In addition to ATM machines, gas pumps are a popular target for “skimming,” in which crooks place a portable card-reading device inside the pump. When a motorist inserts a debit card and enters the required personal identification number, the hidden device (which can be purchased on the Internet for less than $100) captures both the data from the card’s magnetic stripe and the PIN. Later, the device is retrieved, and the stolen data is used to create a duplicate card to raid the victim’s bank account.

Why gas stations? With only a handful of manufacturers of gas pumps, one key in the hands of a thief who gets a job at one station can be used to open pumps and install other skimmers elsewhere, especially at night or when unattended. And with older pumps, PINs may not be encrypted. If you must use a debit card (and it has a Visa or MasterCard logo versus being a cash-withdrawal-only card), choose the “credit” screen prompt, instead of “debit,” so you don’t have to enter your PIN. This way, the purchase amount will still be deducted directly from your bank account, but it’s processed through a credit card network, providing greater protection if fraud occurs.

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Online Purchases

Along with providing added security should the retailer fall victim to a data breach - a hacker can’t overdraft your bank account with a credit card - most credit cards (versus some debit cards) offer extra protection perks. If you don’t receive the merchandise, it’s defective or the wrong item, and the vendor won’t issue a refund, it’s easier to dispute charges with a credit card.

Many credit cards also offer extended product warranties (usually for one year beyond what’s offered by the manufacturer), and some provide price protection up to 90 days, issuing you the difference if the identical item is sold for a lower price than you paid. Although certain debit cards offer these protections, the hassle factor can be greater.

Big-Ticket Items

Rewards aside, the above-mentioned credit card perks are especially useful for expensive products, whether purchased in store or online.


Eateries are among the few places where a payment card can leave your sight, and crooked waiters can - and sometimes do – disappear to write down its number for possible identity theft. Even without a PIN, someone can use your card number to make fraudulent purchases online. And restaurants without sit-down service can pose a threat, since some (along with other businesses) keep customer payment information on file but may not safeguard it.

Retail Stores

Several months ago the FBI predicted an increase in cyberattacks using sophisticated malware that specifically targets point of sale (POS) systems such as cash registers and card-swiping devices. It was this “memory-parsing” malicious software (also known as a “RAM scraper”) that was behind the well-publicized hacking of payment card information of some 110 million Target customers over the Christmas season – and responsible for nearly two dozen other attacks in the past year.

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True, credit cards are also vulnerable in such POS attacks. But with more protections, credit card issuers always eat those losses (minus a possible $50 cap) should your plastic be hacked. Depending on when you learn of and report fraudulent use of hacked debit card data, you could be on the hook from unauthorized activity.

When a Deposit Is Required

Risk of identity theft aside, credit cards are a wiser choice for transactions in which the final bill is uncertain - e.g., hotels, rental cars or even tools rented from a home improvement center. Reason: With a debit card, a “hold” can be placed on your account that may be greater than the expected bill, such as for hotel incidentals, including room service, or for a predicted failure to return a rental car without a full tank of gas. If this occurs, you could be denied access to the additional hold amount from your bank account until the final bill is tallied. With a credit card, hold amounts may initially appear as a pending charge until your final bill is paid, so it may not be debited until the final bill is paid. Gas stations also place holds on debit charges, which is another reason to use credit cards.

For information about other scams, sign up for the Fraud Watch Network. You’ll receive free email alerts with tips and resources to help you spot and avoid identity theft and fraud, and gain access to a network of experts, law enforcement and people in your community who will keep you up-to-date on the latest scams in your area.

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hollygrant 5pts

When ordering anything I use a credit card.

number8gurl 5pts

I do more online shopping than brick and mortar shopping and I've developed a way to safeguard myself that works pretty good: I always pay with Paypal (account linked to my bank account but doesn't use my debit card#). If the site doesn't offer Paypal as a payment option I use a credit card.

2Papa 5pts

I use my debit at the casino all the time and have never had a problem.

Ronzo1954 5pts

Maybe I should just lock myself in my house. 

FayLind 5pts

I hate credit cards, I want to pay for what I get and be done with it. Not giving interest to credit card companies. They have ruined too many people. I use my debit but I also check my bank balances on line every day, most times twice a day, Just takes a few seconds and done. If my card is hacked, it would show up and wouldn't I be safer that way than if they hacked a credit card?

klcooper99 5pts

So what's left that you could use a debit card?

Shay45 5pts

Well, crap. According to this, I can't ever use my debit card. 

wizard11m 5pts

My SS 'check' is a debit card issued by a certain bank under authority of the Treasury Department. If I followed these guidelines I would not be able to eat much less do anything else. Seems that AARP does not realize that some of their members have no other meaningful source of income.

ab1166 5pts

Not a very useful article.  Alarmist and overly restrictive.  A better use of words would have been to inform readers on how to spot skimmers (or tampered card readers), how to check reviews on online retailers, and how to spot a bogus website by reviewing the contents of the URL.

unclescotty 5pts

So if your debit card also carries a Visa/Mastercard logo and you have the option of selecting "Debit" or "Credit" (even though it all comes out of the same checking account regardless_ ) are you protected as a credit card would be if you choose "credit?"

jta32 5pts

People need to understand that when you use a credit card you are spending borrowed money from what ever credit card company you use. I repeat! You are spending borrowed money and since it's not your money you have to give it back by either paying it off or making payments every month. Just think that credit card payment you make every month could have been used for something else. When I use my debit card I know two things, 1. it's my money I saved up for the things I want to buy and 2. I don't have to worry about monthly payments or credit scores or none of that stuff. If I lose my card or if it gets stolen I get a new one just like a credit card. Anyway, that's why I think there is so much negative talk about debit cards because more and more people a starting to save up for the things they want to buy whether it's that big screen TV or a new car or a new home and all that negative talk about the debit card is just to discourage people from saving their money. Look at our government. Over the decades our government has borrowed so much money it can't pay it off because of the interest and that's a bad thing for all of us! So like I always say, if you want to buy that big screen TV or that fancy new car or a brand new home then SAVE YOUR DAMN MONEY!!!

br5418 5pts

I have used my debit card for everything forever and have never had any issues like this.

tnjerry 5pts

I had a credit card stolen a few years ago and am still recovering from the damage it did on my credit and finances.  For some reason, the credit card company DID NOT remove all the charges made by the thief, but thankfully, did remove most of them.  Also, the thief was somehow able to get my number on another credit card I had at the time and made one large purchase using it that the credit card company never did remove from my charges.  The resulting interest and extra amount charged kept me from paying off those two cards at the end of the month as I always did before, and eventually, along with some medical bills and being disabled for 8 1/2 months before being able to return to work afterwards, put me in bankruptcy court.  Another mistake, but am trying now to recover from both.  Just be careful who you meet, and who you allow the opportunity to steal a card from you.  The person that stole mine was someone I trusted, but who saw I had left my card next to my computer while in my house and stuck it in her pocket while I was in the bathroom.  I didn't realize it was gone until 3 days later when my card company called me to question some "unusual" purchases made on it.  I asked for it to be cancelled at that time, but even after the company supposedly cancelled it, it was used for a few days afterwards to continue to make charges on it (some were done over a weekend and not posted until the next week, but a few were actually made up to 11 days AFTER it was supposed to have been cancelled). 

2Papa 5pts

I do not and will not ever have a debit card.  I see absolutely no advantage to them.  Just use your credit card and pay it off every month.  If you can't afford something, don't buy it!

dizzybtch 5pts

So basically never then?!!  I have a debit/credit card and I use it to live very simply within my means.  In my entire life there has only been one incident, my bank called me some ten years back to tell me that someone a few hundred miles away was using it.  This person had already had lunch at a fast food place and was now attempting to buy a computer or tv, the bank had already refused payment and was just letting me know.  I was not held responsible for any money at all.  Together we cancelled the card and a new one was sent to me within five days. 

I refuse to have a credit card, it is far too easy to live beyond your means and find yourself in debt.  We had them years ago, then my husband had a stroke which left him disabled and unable to work; we had to declare bankruptcy.  It was one of the most embarrassing times of my life.  Nope, never going to have credit again.  Debt is something that should only be used for a house and a vehicle, Americans have become a society dependent on instant gratification.  If I want something, I wait and save for it.  I often shop thrift stores when I need a piece of furniture that I cannot afford to buy brand new.  I do check my bank account on a very frequent and regular basis, everyone should.

ss26733359 5pts

I recently bought tickets for myself and my wife thru Cheapoair.com.my departure date was not what I asked for,so I contacted them to make corrections,was charged $113.20 then when I complained about that Iwas charged $128.03 additional. AS a company advertised on your website,it makes A.A.R.P look bad. .

decalpha3 moderator 5pts

I am still surprised people use debit cards at all... for anything... With credit cards there are many protections and one, basically, gets a free 30-60 day loan (depending on when in the billing cycle you make your purchase).  Are there ANY advantages to using debit cards?

newtonr 5pts


You could just pay off the balance no interest is charged if you do that within the statement period.

PhoinixGroup 5pts

@Shay45 Good call Shay.  First time my acct gets whacked, I promise I will be at the bank so they can replace every dime I lost.

ZEBerry 5pts

@unclescotty Yes, absolutely! If you have any question at all, contact your bank or credit union. However, if they have their own credit card (not connected to your checking or savings account), they will try to "upsell" you one. Some financial institutions require tellers to sell a quota of credit cards or other services.

slstein 5pts

@jta32 The discussion here is if your debit card has a MC or Visa logo on it, to use it as a credit card, so you receive the utmost protection, and least liability ($50.00) if your card is breached. That "borrowed" money is not borrowed at all, if the debit card is linked to your checking account. The transaction is just PROCESSED through Visa or MC, then it goes to your bank for the final withdrawl. I do it all the time, and may not process through your bank for up to 48-72 hours. If you use your PIN number/debit, you will see the transaction post to your account immediately. 

Just noticed ZEBerry's post...Right on!

ZEBerry 5pts

@jta32 However, by using my check card on the credit setting, I get the same protections offered all credit cards, AND I have no debt. Thank you Dave Ramsey!!!

ee1690 5pts

The credit card company should have been held responsible for all charges made after you cancelled the card. Sometimes we have to fight all the way to the top. Remember to always get individual's name and ID number where applicable and keep a listing with date and time of conversation. This task has afforded me many opportunities to prove my case in my favor.


roobydooby 5pts

@tnjerry   I hate credit cards.....mainly because I am in debt, but I do have one good thing to say about Discover Card.  Twice my Discover card was used for unauthorized purchases and twice I was notified almost immediately about "suspicious" behavior on my account with Discover.  Both times the dollar amounts were significant ( about $1000), and Discover closed the card immediately and they reversed ALL charges ! so, tho I cuss each time I send my payment to Discover, I praise their fraud department. They're on the ball !!!

Malena5058 5pts

@2Papa I do not and will not ever have a credit card.  I see absolutely no advantage to them. Just use your debit card and it is paid for right away. It you can't afford something, don't buy it.

There is no yearly fee for a debit card and no interest.

Malena5058 5pts

@decalpha Debit cards are for spending money you have-- why borrow ANY money even for 30-60 days.  My husband and I never carry more than $20-30, so we use the debit card. In the past, we used personal checks (remember those, for purchases?) and this is a lot quicker easier (debit card).  About a year ago, we had $400+ of unauthorized purchases made in some far away state--from our home state.  We got every cent back into our account and I was surprised and very happy, as I too thought debit cards have no protections.  It used to be that way, but no more.  Check with your bank and/or make sure you find out when getting a new account and debit card.

lw1227 5pts

@decalpha Yes, for shopaholics like me, it's a tool I use to keep my spending in check. It's not just a question of willpower, it's a sickness, like gambling. Admitting it's a problem is the first step. ;-)

pturvill 5pts

@lw1227 @decalpha  We get a 10-cent per gallon discount for using a debit card rather than a credit card at our local pay-at-the-pump gas station. We also monitor our bank accounts on line pretty much daily.