The Consumerist site had a great story titled “Why Do Lenders Want You To Use Your Debit Card Like A Credit Card?” in which they brought up the issue again about the differences between a credit card and a debit card.
Debit cards have invaded our lives and they are pushed like crack by our banks. The information the banks give us is that they are safe to use, but are they as safe to use as a credit card?
Banks made the big conversion from regular ATM cards to debit cards because debit cards make them money every time you use it. They get a percentage of the transaction fees every time you use the card.
You need to think about your debit card like a check. If you would not feel safe in writing a check when you are making a purchase, don’t use your debit card. A mistake on a debit card transaction by a merchant is not an annoyance like it is with a credit card, it can actually drain your checking account, cause all sorts of things to bounce and screw up your rating with check writing credit bureaus.
In the U.S. there are completely different laws which cover the credit card and debit card. I’m not going to go into all that again but let me give you a quote from that story in The Consumerist:
“Remember, though, that paying with a real credit card conveys certain benefits. It may give you more protection in terms of disputes or extended warranties, and in cases where the merchant places a hold—hotels and car rentals, for example—a real credit card will prevent your checking funds from being frozen indefinitely. Your bank may in fact extend those benefits to any signature debit transactions on your debit card, but you’ll have to contact your bank to find out.”