10 Places Not to Use Your Debit Card
finance.yahoo.com
finance.yahoo.com
Similarly, gas stations are often completely automated, and even where they aren't, you don't even hand your card over to anyone - you put it in the card reader yourself.
Online, my use is dependent on how much trust I have in the vendor. If it's Google, I use a debit card. If it's Paypal, I use a credit card.
There have been reports of gas station card readers that recorded information for use by thieves.
And moreover, signature based debit card transactions make the bank the exact same amount of revenue as the same transaction on a credit card. As long as you pay the card off every month then what we're talking about wrt revenue is the discount rate. A merchant provider doesn't distinguish between types of cards-- they all have the same fees-- they only distinguish between issuer (Visa/MC vs Discover and Amex).
Of course this is anecdotal evidence so take it with a grain of salt.
First, the refund they give you is preliminary.
Second, there is a common scam that debit cards are susceptible to and credit cards are not. It goes like this: I steal your debit card info. I mail you something trivial. A trinket. Cereal box stuff. I send it USPS Signature Confirm. It has "Reward Dept" listed on the outside and you sign for it.. I mean, why not? You're perplexed by the contents. Somebody spent $3 to mail THIS?
I charge your debit card. Hundreds of dollars. Not usually thousands, not big enough to make FBI radar screens.
You call Bank of America. They give you a preliminary refund. They investigate. They call me, the perpetrator, as part of the charge back process. I say "Oh, well, I have A. Brown's signature from USPS, as you can see right here."
They take the money out of your account. They call you. You are incredulous. You ask for a supervisor. You demand "So if I buy a laptop and they mail me a brick, you can't help me? Just because I signed for it?" They explain that "How would we know? You'll have to sue them to get your money back."
You see, there's a very big difference. With a credit card, the bank is on the hook, until you pay your bill. Until you pay, the fraud is perpetrated against THEM. And federal law gives you right NOT to pay a disputed charge. With a debit card, you are the victim. Hell, the bank even made 2-3% on the fraud.
Not to mention, as I replied above, I make between 2 and 3% cash back each year on my credit cards. We're not rich, but even at our spending, that's a nice chunk of money each year. Far better than the measly "points" some debit cards offer.
(Edit: And in the same vein, once you pay your CC bill, you lose most your rights and conveniences for dealing with fraud. That's why it's important when using things like BoAs ebill initiated payments to still review your statements before you pay the bill.)
Here, they have a much different fee structure than credit cards for supporting businesses, so some businesses choose to not support one or the other for small purchases where it isn't "worth it" to them. Also, there's no way to put a "hold" on this kind of card—it's basically an immediate wire transfer, not a cash advance, and the terminal you use a debit card in doesn't (can't) store anything that could be used to charge you further after the fact. Thus, they're much more widely used here, because the amount that shows up on the keypad is the amount your account will be charged, never more or less.
The only problem with them is that, unlike with credit or check cards, they have to be able to directly dial their own bank infrastructure (via an agreed-upon protocol, here called INTERAC) to function. Thus, in a foreign country, it's much easier to just use your credit card.
I agree about the risk, but my bank won't give me an ATM card that isn't also a debit card.
What US bank still issue ATM only cards?
See my reply to abrown above, who, like you, mentioned he's been "using debit for 15 years without problems."
Good for you, but you're wrong to call FUD. The scam I explained to abrown is just one of many downsides to debit over credit.
It also leaves out the half dozen wonderful benefits good CCs have. Things like automatic doubling of a manufacturers warranty, price matching if a price drops within 30 days of purchase, very generous cash back, defect, damage, and theft protection, federally guaranteed fraud protection & rights. Etc. I could go on. No FUD here, debit cards are risky.
These "don't use debit cards, they're risky!" warnings are extremely reminiscent of the BS TSA regulations. They don't represent a sane, robust risk assessment, they represent merely an overreaction to certain very unusual risks.
What I do know for certain is that credit cards have a number of federal regulations protecting consumers from fraud, and debit cards do not. I also know that with debit card fraud, it's YOUR MONEY that's stolen from you. With CC fraud, it's not.
Most importantly, I know that a CC is superior to a debit card in every way. That there is definitely more risk with a debit card, and absolutely no reason to accept that risk, unless you cannot qualify for a credit card. And because of that, I think that doing what you did here, advocating that any skepticism of debit cards is "FUD" is irresponsible. That's why I've replied.
Internet, identity and "Credit Card" fraud (including debit cards in that) is the fastest growing category of crime in the country according to the FBI.
Then why do they still exist? Yes - this is a snarky question, but a valid one, IMO. If they are so obviously bad and horrible, why do they even still exist? Why is there even a debate?
They make an enormous amount of money for the bank and for the processor. That doesn't mean they're good for consumers.