7 Times You Shouldn’t Use a Debit Card for Payment

Hint: It could put your bank account at greater risk.

1 / 8

The don'ts of debit cards

Swiping a debit card is an easy way to make a purchase when you don’t have cash. But there are plenty of reasons you should be wary of using them, consumer experts say. "They’re good for routine transactions and certainly if you’re looking to keep your spending within limits, they do provide you a little bit better way to manage that," says Leslie Tayne, a financial attorney and author of Life and Debt: A Fresh Approach Toward Achieving Financial Wellness. "But for major purchases, credit cards are usually a better way to go because they will offer you more protection."

The convenience of using debit cards may be outweighed by the risk of fraud. "I think it’s always a bad idea to use your debit card to make a purchase," says Kimberly Palmer, the personal finance expert at NerdWallet. "The only reason you should use your debit card is to withdraw money from an ATM or a bank."

On top of that, by using a debit card, you’re missing out on the rewards you can earn from buying items with credit cards. So here’s when you definitely don’t want to use a debit card.

2 / 8
African businesswoman standing by bed in hotel room with her luggage talking over cell phone. Female executive on business tour talking on phone from hotel room.Jacob Lund/Shutterstock

When staying at a hotel

Debit cards are linked to bank accounts. When you use a debit card at hotels, employees will often put a hold on the amount of time that you’re staying, plus some extra money in case you have other charges. "That could definitely impact your ability to use the account for other expenses," Tayne says.

Check out these creative ways to save money you haven't thought of before.

3 / 8
Side view of good looking man driving a car and paying attention to the roadantoniodiaz/Shutterstock

When renting a car

Car rental services also place a hold on money in your account when you use a debit card. So you won’t have access to those funds while you’re using the vehicle, Tayne notes. That’s not a problem if you have plenty of money in the account, but it could lead to bounced checks and overdrafts if you don’t.

Don't miss these money saving tips that don’t work.

4 / 8
Couple riding motor scooter in old Ibiza street, full lengthMonkey Business Images/Shutterstock

When travelling abroad

People travelling overseas are often buying things in unfamiliar places. That’s why Tayne recommended to her daughter that she get a separate debit card tied to a bank account with only a limited amount of money in it. "In case it somehow gets hacked, it’s not tied to the majority of her money," Tayne says. "Because a debit card does tie right into money, versus a credit card that doesn’t tie right into your usable cash."

Here's when paying for an upgrade is a waste of money.

5 / 8
Pretty islamic female sitting at cafe table and working on laptop with coffee in side. Businesswoman in hijab working from a coffee shop.Jacob Lund/Shutterstock

When shopping online

Using your debit card to buy from websites can also put you more at risk. And if you discover a fraudulent charge, it can be harder to dispute when the payment is made with a debit card instead of a credit card. "Even though banks still have protections in place for you with your debit card, a fraudster could empty out your bank account before you even realize that your debit card has been compromised," Palmer says. "And that’s a huge risk for people because people use their bank accounts to pay for all kinds of things, from utility bills to mortgages and rent."

Be sure to keep these simple tips for safe online shopping in mind, too!

6 / 8
A portrait of a pair of young and excited Asian travelers (Korean man and his Indian friend) checking in to board their plane for their holiday at an automated check-in booth in the airport.mentatdgt/Shutterstock

When you want to earn points

"If you use a credit card, you can earn rewards on all your purchases," Palmer says. "That’s not the case with a debit card." So if you’re looking to earn miles and rewards, get a credit card with those perks.

Find out how to use credit card rewards to upgrade your vacation

7 / 8
Customer shopping designer wear at a fashion boutique. Woman entrepreneur handing over shopping bag to the customer.Jacob Lund/Shutterstock

When you want to build your credit

Debit card purchases also don’t count toward your credit score. When you buy things on your credit card and pay off your balance every month, however, that helps build your credit.

8 / 8
Arab woman and automated teller machine . Woman withdrawing money or checking account balance.Kdonmuang/Shutterstock

When you want to keep tabs on your budget

While opinions may differ on this approach, it may be easier to organize your budget using a credit card because you can see all your daily expenditures in one place. "For me, it’s easy to analyze my statements instead of pulling out my bank account and trying to do it that way," Palmer says.

Now that you know when you shouldn't use debit cards, learn about all the ways to get out of credit card debt. 

Originally Published on Reader's Digest