CONSUMER CORNER: Debit Or Credit?

Provided by the Bucks County Department of Consumer Protection:

Bucks County Consumer Protection is often asked about Credit Cards vs Debit cards. Our advice is despite the convenience, there are many reasons why you should not use your debit card for anything but withdrawing money from an ATM. Using your debit card for purchases to avoid paying interest on credit cards could compromise your financial well-being in devastating ways.

Fraudful activity regarding the use of debit cards continues to occur. The most widely known scam is the use of “skimmers.” Skimmers are inserted into the credit card slot, unbeknownst to the user. The skimmer retrieves critical information from the Debit /Credit card (like the PIN).

In some cases, it transmits wirelessly or sends it to the criminal base who inserted it, thereby giving the criminals access to your bank account. If that happens, your entire account could be wiped out. Obviously, you should report this to your banking institution and your local police department non-emergency number immediately. Banks can charge a fee for not reporting fraudulent activity right away. Possibly, your bank will replace the money pending an investigation, but what if they don’t? How are you going to pay your mortgage, utilities, food, etc?

Debit cards generally don’t have the same protections as credit. It is best to check with your issuing bank the terms of the card and how debit and credit are different. Here are some of the basic protections and consequences of what happens in cases of debit card fraud versus credit card fraud, courtesy of the Federal Trade Commission.

As a final word of caution, here are six places you should definitely not use a debit card:

1. Buying airline tickets: Lots of things can go wrong, up to and including your airline going bust. For example, travelers who booked on Wow Air using debit cards had no way to get their money back when the airline went out of business in 2019.

2. Using independent ATMs: You increase your risk of becoming a victim of skimmers if you use unbranded ATMs. Skimmers can be found on bank ATMs, too, but they’re less likely because there are often security cameras in place.

3. Paying at the pump: When you swipe your debit card at the gas pump, the station usually puts a $1 hold on your account to validate the account. But sometimes that amount is more than a dollar, and the hold lasts more than a few hours. This could cause you to overdraft your account. If you must pay with debit at a gas station, pay the cashier to avoid this.

4. Buying online: A credit card is a much better option when buying anything online. If anything goes wrong with the transaction, you can dispute the charge and have a much better chance of getting your money back from the bank.

5. Dining out: Because wait staff are transient in nature and there is such high turnover at some restaurants, you run the risk of a dishonest employee getting access to your card number (and remember, you have less legal protection than if you pay with a credit card).

6. Purchasing appliances: Many credit cards will double the manufacturer’s warranty on products you purchase with your card, giving you extra benefits when you’re making an expensive purchase.

To learn how to protect yourself from scams and fraud, please visit our website at; www.buckscounty.gov/cp.

Monthly Fraud Alerts brought to you by Bucks County Crimes Against Older Adults Task Force 24-hour hotline: 1-800-490-8505, Bucks County District Attorney’s Office: 215-348-6344, A Woman’s Place (AWP): 1-800-220-8116, Bucks County Area Agency on Aging: 267-880-5700, Bucks County Office of Consumer Protection: 215-348-6060, Bucks County Coroner’s Office: 215-348-3852, Bucks County Register of Wills: 215-348-6265, Network of Victim Assistance (NOVA): 1-800-675-6900, and U.S. Dept. of Health and Human Services/OIG: 1-800-447-8477.