When NOT to use your debit card

How do you pay for your purchases? It may be instinct for you to pull out any piece of plastic without thinking, but your random card of choice might not be the safest way to pay. Let’s explore when and how to use your debit card.

How debit cards differ from credit cards

Debit and credit cards look very similar, but they have little in common. Credit cards allow you to choose your purchases now and pay for them weeks or months later. A balance that grows over time will be charged interest, but if you make timely payments, you’ll have yourself a small loan that usually costs you little to nothing.

Credit cards also offer rewards, purchase protection and the ability to back out of a purchase you’ve decided against. You can also contest fraudulent charges on your account, or freeze your credit on a compromised card.

Debit card payments, on the other hand, will take the money right out of your checking account as soon as you swipe. There’s no interest here, but there also may be less purchase protection.

Debit cards are great for helping you stick to your budget and steer clear of debt. However, because they may offer little recourse in case of fraud, credit cards can be the better choice in vulnerable situations.

Three purchases to carefully consider before using your debit card

Here’s where you may not want to use your debit card:

 1) When making a deposit

Sometimes you need to put down a deposit, like when booking lodging, arranging for work on your home or making a big-ticket purchase. If that deposit is refundable, don't use your debit card which will take that money out of your account. Use a credit card instead. They will get their deposit, and you will retain access to all your money.

2) Hotels and gas stations

Certain businesses, including hotels and gas stations, will place a hold on your card when you check in or fill your tank. The holds typically take several hours to several days to resolve. Hotels do it to cover any unexpected expenses discovered after you leave. Gas stations do it because the actual cost of your gas isn't immediately communicated to the financial institution that issued the card, and the gas station wants to make sure it will get paid. You'll barely notice a temporary hold on your credit card, but it can cause real problems when it happens on your debit card, including causing you to overdraft your account.

3) For large purchases

If you’re springing for a big-ticket item, use your credit card. It’ll offer you dispute rights in case the product doesn’t turn out as you expected.

Keep your cards secure by using Card Control and Card Management to manage your Oregon State Credit Union debit and credit cards. These two powerful services enable you to mark your card lost or stolen and order a replacement, block certain kinds of purchases and send alerts when selected types of purchases are made. You select which types of purchases will trigger an alert. Card Control and Card Management give you greater control over your card security.

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