5 places experts say you should never pay with debit card

SALT LAKE CITY – If you’re trying to stay out of debt, you may be hesitant to use a credit card. But choosing a debit card instead could cause some serious financial headaches in certain situations. Here are five places not to use a debit card.

GAS PUMPS

Thieves around the country have installed skimming gadgets on gas pumps to steal details from the magnetic stripes from the cards of drivers.

Kelsey Fayles unknowingly swiped her card through a skimmer.

“I had to contact my bank and we had to go through a lot of paperwork,” Fayles remembered. “It’s just a lot of time and kind of a pain.”

But skimmers aren’t the only risk debit card users run at the gas pump.

Some stations place holds of $50 or more on your account to make sure you don’t pump more gas than you can afford.  That’s money you can’t use until the hold clears, which can sometimes take days.

If you need to buy gas with your debit card, your safest bet is going inside the station and paying the cashier directly instead of sliding your card through the pump. And typically, there won’t be a hold.

HOTELS

The next place you should avoid using your debit card is at a hotel. Hotels will frequently place a hold on your bank account for the amount of the entire stay plus more to cover any unexpected costs, effectively freezing a sizable chunk of your bank balance.

RENTAL CARS

Same goes for rental cars where some agencies will place a hold from $350 to $500 on top of the rental amount. Also, they’ll often do what’s called a hard credit check of debit card users to help ensure they’re not renting the car to someone who might trash or steal it.  That credit inquiry could ding your credit score, especially if you’re relatively new to credit or have few lines of credit open.

ONLINE SHOPPING

Before you use your debit card to shop online, consider this: if a cyber-criminal steals your card number to make fraudulent purchases, it will drain your checking account.  That’s money for rent and bills you can’t touch until the bank wraps up its investigation weeks, even months, later.

“I feel like credit cards are safer,” Nicole Butler said.  “They’re more secure and you can get the money back as far as whatever is taken out of it.”

RECURRING PAYMENTS

Using a debit card for automatic payments, such as cable bills, utilities, gym memberships and subscriptions also poses problems.  Many consumers have experienced the frustration of cancelling a service or membership but still getting charged for it on their cards.  It’s much easier to dispute a charge on a credit card. And avoiding automatic payments on a debit card also saves steep overdraft fees if you lose track of what day an auto payment will hit your checking account.