When a credit card is better than a debit card

[4evermom]

An article that points out some risks in using a debit card...
10 Places Not to Use a Debit Card
http://finance.yahoo.com/banking-bud...ecking_savings

[mum4boys]

We prescribe to the Dave Ramsey line of thinking when it comes to credit cards. A lot of those things are easy to over come without using a credit card. Shopping online we have one account dedicated to this so if it was stolen there is only enough money in there for those purchases.

[Shellie]

I honestly think most of those are weak reasons not to use a debit card in those 10 situations. Bank with a bank that protects you and the risk is minimal.

My bank will return any stolen funds w/in one business day. They back me up on disputed purchases--I've disputed about 4 charges in the past 4.5 years that I've used my bank and they've reversed them immediately (as a temp. reversal) and found in my favor in all of them.

The only thing I can think of is car rentals....around here at least you CANNOT rent one without at least $150 available on a real credit card...no debit cards allowed.

Also, on the equipment rental or anything else using a deposit, I have used my debit numerous times. Typically the deposit is around what I'll owe anyway (u-haul for example) and they run an auth. and not a charge--then they finalize the charge upon return. I suppose if one's checking balance was really tight it'd be easier to use a credit card but if my balance couldn't accomodate a $200 deposit, I probably wouldn't be renting whatever it is.

That said, we do have a smaller limit card we use for dh's general expenditures and we pay it off a couple times a month. This is our back-up if we need a car rental. The reason we do this for him is that he lost his debit card several times!

[frontierpsych]

Very Interesting!

[Drummer's Wife]

I haven't read the article yet, but have only used debit cards for years (7-8 years?) and have got by just fine w/o credit cards. The one thing I hear people say is you can't use debit cards for hotels, but yet we do so frequently (just got home from a week in CA last night). We've never had a hold put on our card when checking in or out.

[Sk8ermaiden]

Thay article was written by creditcards.com!!

Also I find none of those valid reasons to use credit cards.

[Drummer's Wife]

So, I skimmed the article - and i use my debit card for all of those that apply to me. Online purchases? Pretty much everyday. Deposits? yup, w/o problem. Big ticket items? Always, considering we have to save up to pay for something since we don't use credit. Restaurants? Several times a week (including fast food). Gas stations? All the time b/c I'm not dragging kids in to pay - I have never had a hold placed for more than the amount. Usually it only takes out a dollar and the full amount comes out in a few days (which bugs me, actually, when gas stations run it as credit at the pump).

I actually like that when I made hotel reservations several weeks ago they charged my debit card for the full amount at that time. I don't want to risk accounting for money that is already spent, yk? It was all taken care of, and there were no hidden fees added later by the hotel. They still had a cancellation policy, and would have refunded if we didn't show up.

Honestly, like others said as long as you have a good, decent bank who protects your purchases and use of the card - there shouldn't be a problem. It really is similar to a credit card. except that you don't owe them any money.

Basically, I don't agree with anything that article has to say.

[RollerCoasterMama]

Those are pretty silly. I've been using a debit card almost exclusively for probably 15 years. The only place I've ever had a problem was renting a car--which we fixed by going to another car rental place at the airport that would take the debit card. And that was 10 yrs ago! I don't know if it would factor in any more!

Keeping a reasonable eye on your bank accounts will do the trick. My local credit union here even calls if I make too many purchases (esp online!). It was surprising the first time, but now I can tell when they'll call. I really like that they do!

[meco]

Originally Posted by Shellie

I honestly think most of those are weak reasons not to use a debit card in those 10 situations. Bank with a bank that protects you and the risk is minimal.

This.

I don't use credit cards, and I don't have any of these problems either.

[mnnice]

I think the article has a point about hotels. We paid for a hotel room with a debit card a couple years and had a mix up (the hotel double charged us) our bank would not credit it back because we had signed the slip. The unethical hotel pocketed our money, I am confident that if it had been a regalar credit card it could have been disputed and we would have won.

I think the other situations listed are not that big a deal especially if a $100 hold (i.e. buying gas) on your checking account is not going to cause a cash flow problem.

[Dar]

How hard is it to get charges reversed with a debit card? I use credit cards whenever I can, and there have been a few times when I`ve needed to dispute a charge (not because of a stolen number or bogus charge, but stuff like items being sent after I cancelled shipment via phone, or internet being autocharged after I stopped service) and it was really easy to not pay and dispute... I think it was all online, just a few clicks.

I would add travel, because I get free flight insurance with the credit card I use most.

Then again, I make so much money by using my credit cards instead of debit cards that I don`t really need extra reasons to use them.

[TiredX2]

The extra warranty with the Amex really makes a credit card more attractive than debit for us (besides the financial reasons). I definately agree with that point!

[Marsupialmom]

In part know your bank!!! Some debit card refunds, like deposits on rental cars can take 10 business days. It isn't the rental car companies being slow it is the bank's system.

This goes for tool rental deposits.

[Drummer's Wife]

Originally Posted by Marsupialmom

This goes for tool rental deposits.

Oh, that reminds me - we rented a hedge clipper thing at the hardware store a couple weeks ago, and they placed a $50 pending debit on the card for a deposit. But once it was returned and the $15 charge went through for the actual rental cost, the $50 charge disappeared. I wasn't sure how long it would take, but maybe it was just my bank - because it was almost instant.

[Marsupialmom]

Originally Posted by Drummer's Wife

Oh, that reminds me - we rented a hedge clipper thing at the hardware store a couple weeks ago, and they placed a $50 pending debit on the card for a deposit. But once it was returned and the $15 charge went through for the actual rental cost, the $50 charge disappeared. I wasn't sure how long it would take, but maybe it was just my bank - because it was almost instant.

My bank is fast. But working in the car rental field, not all banks are! We do our part immediately. We can't help that a bank doesn't process on the week ends or after X o'clock or for a mysterious reason take 10 days.

[lalaland42]

I like the auto insurance that comes with some credit cards. Otherwise, I almost never see a good reason to use a credit card.

[ArtsyMomma]

Originally Posted by Sk8ermaiden

Thay article was written by creditcards.com!!

Also I find none of those valid reasons to use credit cards.

Yep. Debit cards have all the same consumer protections as credit cards.

[TiredX2]

Originally Posted by ArtsyMomma

Yep. Debit cards have all the same consumer protections as credit cards.

Well, not all the same. Since different credit cards have different policies, there is no way that debit cards can match them all. For example, if you use your Amex it automatically extends the warranty on any item you buy. What debit card does that?

[Shellie]

Originally Posted by TiredX2

Well, not all the same. Since different credit cards have different policies, there is no way that debit cards can match them all. For example, if you use your Amex it automatically extends the warranty on any item you buy. What debit card does that?

I don't think there is a debit card that will match Amex's benefits or the rewards programs that some cards offer. I've seen only Visa or MC debit cards and they do carry the same fraud protection as Visa or MC credit cards. Where one banks is a huge factor in how easy/difficult it is to get help if something goes wrong. I've successfully disputed 4 charges with a simple phone call.

I tend not to think of Amex as being as "evil" as other credit cards...at least not the traditional Amex that have to be paid in full every month. The revolving ones are a slippery slope--I've seen so many people use them heavily for the rewards and somehow slip into not paying them off monthly despite the best intentions. That's here the badness comes in. For the most disciplined, I suppose it's not ever a problem but I would venture to say most people don't fall into that category. That's why this article pushing fear of debit cards and reliance on credit cards, for very weak imho reasons, really rubs me the wrong way.