7 On Your Side: When using your debit card could cost you money

NEW YORK (WABC) -- Black Friday is just days away, and one of the decisions for shoppers to make is how to pay for purchases. The latest numbers indicate nearly 60 percent of all purchases are still made with a debit card, but before you reach for the plastic, pump the brakes and consider a handful of debit card don'ts that just might save you hundreds or thousands on your next purchase.

"Never use your debit cards if you're shopping online," MagnifyMoney Executive Editor Mandi Woodruff said. "That's because you have way less protection if someone were to hack into your account and steal your money."

Woodruff cautions that not all plastic is created equal, and if you shop online with a debit card, you could be liable for everything you've lost -- which means the bank will not refund you that money.

"Credit cards are the way to go, because many credit cards have something called Zero Fraud Liability," Woodruff said. "That means if someones takes money from your credit card account, your credit card company will refund you."

Big-ticket items are also best when charged on a credit card, not a debit card. So if you're eyeing that luxury TV for a holiday gift, most credit cards offer additional dispute rights if the merchandise is defective.

Next, don't use debit for large deposits.

CreditCard.com says if you're purchasing home improvement items at a big box store and the store wants big money down, put it on a credit card. The store has its security, and you still have access to all the money in your bank account.

Dining out is also a debit card don't. When the check comes and your card leaves your sight, there's the potential it could be quickly scanned onto an illegal reader and drain your money directly out of your bank account.

If you don't want to run up your credit card charges, Woodruff suggest loading a little bit of money on your debit card at a time and never park your entire paycheck there. That way, in case of fraud, there will be less to lose.

"Only keep a small amount of money in that account," she said. "So when you get paid, think about transferring your funds to a separate checking account so you're not carrying that around every day."

Some more big takeaways, be wary of using your debit card at non-bank ATMs or self-serve gas pumps. These are the favorite targets of thieves who set up debit card skimmers to rob your bank account.

Some hotels will place "holds" on your debit cards to cover any additional costs, like mini-bar charges. This means you could have a charge in the hundreds. If you have a bank account with a low balance, this unexpected charge could throw your balance into the negative.

Also, never use a debit card for "recurring charges" like a gym membership. If you have a dispute or cancel your membership, your account could keep getting dinged for monthly charges. You'll have much more recourse with a credit card.


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