The Downfall of Debit Cards

With more and more people using debit cards exclusively these days, myself included, there comes more problems.

I’m starting to see more and more stories of people either being overcharged or having holds placed on their accounts for various reasons.

Here are some of the downfalls I’ve seen of using debit versus credit cards:

  • some places put holds on your accounts to insure payment (gas stations, hotels, etc)
  • you may not benefit from the same protection as credit cards when it comes to unscrupulous merchants, fraud, etc. (I had an experience with this last year where the bank specifically told me they could help me if I had used my credit card instead of my debit card…)
  • credit cards sometimes offer cash back rewards or airline miles per dollar spent
  • liability protection is better in most cases (smaller liability limits, if any; it doesn’t hold up your funds if something goes wrong, etc…)

I have not bought checks for about three years now and don’t plan to any time soon. I have been using my debit card but I am thinking about switching to a credit card instead (with cash back incentives or airline miles included of course) and just paying the balance in full every month.

With all the risks: holds, overcharges, limited protection, etc; it seems to make sense.

What are your thoughts?

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