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9 places you should never use a debit card

A while back, Clark Howard published an article that listed 4 places you should never use a debit card. It was such a popular topic, he had a follow-up with more places for your consideration. Here’s the follow-up from Clark and Theo Thimou are:

1. Pay at the pump

Skimmers aren’t the only danger to your wallet. The gas station will put a big hold on your account, typically for 4 days, that could cause your checks to bounce. If you must pay with debit at gas station, go inside and pay at the cashier.

2. When you’re buying online

Credit card is a much better option. If you don’t get your merchandise, you can do a chargeback during a 60-day window.

3. At the supermarket

A couple of years ago, Save Mart supermarkets were hit by criminal rings that put skimmers on the credit/debit card readers at self-check lanes in 20 Save Mart and Lucky branded locations throughout California. Very often, this particular kind of scam will be perpetrated by a crook dressed in the counterfeit uniform of the technology company that does regular routine maintenance on credit/debit card readers at a business!

4. At the car rental counter

Pamela Yip of The Dallas Morning News found that it’s standard practice (and completely legal) in the industry for car rental companies to do a hard inquiry on your credit report, often without your knowledge or consent. They’re trying to protect themselves against auto thieves that love to use debit cards as a low-risk method to get rentals that they can steal. But that inquiry can drastically lower your credit score in the process. The simple solution is to use a real credit card instead.

5. When booking advanced travel

If you have concerns about the solvency of a company you’re buying future travel from, you’re better off using a credit card. This holds true particularly during an economic downturn when leisure travel businesses like cruises and some airlines can go bust. Paying with credit card ensures you can do a chargeback if you don’t get the travel you paid for.

While we’re at it, have you considered trip insurance if you’re taking a cruise, a tour, or traveling on a trip that requires pre-payment of thousands of dollars?

6. When buying furniture and major appliances

If you are ordering furniture or appliances and waiting on delivery, pay only by credit card. You reduce your risk if the store goes bust by doing that, which we saw a lot of during the housing slump when furniture and appliance retailers really took it on the chin. If you do not have your delivery within 50 days, put the credit card charge in dispute. You lose all right to any dispute after the 60th day.

7. When setting up automatic drafts

Auto drafts are a favorite way of utility companies, cable companies, health clubs, burglar alarm companies, and even mortgage lenders to get their money from you each month. But that business may continue to make monthly automated clearing house (ACH) debits from your account once your contract with them ends. That is illegal and you can get it to stop by citing what’s called “Regulation E” and using Clark’s sample letter to stop automatic payments.

8. Independent ATMs

You run the risk of skimmers. While skimmers can be found on bank ATMs, they’re less likely because there are often security cameras in place. 

9. At a restaurant

Because there is such high turnover at restaurants, you don’t want a dishonest employee to get hold of your digits.

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