Why debit cards are dangerous

If you use a credit card at a hotel, the hotel takes an imprint when you check in, but doesn't charge your card until you check out. It's a far different story with a debit card. Generally, hotels will put a "hold" on funds in your account for more than you're spending. Yes, more.

They hold the full amount of your stay, plus an estimated amount for "incidentals," such as meals at the hotel restaurant and dipping into the mini-bar. This is not an actual charge--the hold will come off your account at the end of your stay. But it affects the available balance in your checking account anyway and can lead to overdrafts. These "holds" are commonly placed on debit card transactions made at hotels, gas stations and rental car companies.

Overdrafts, overdrafts and more overdrafts Overdraft charges have been soaring in recent years and the vast majority of consumers who pay them explain that their overdraft was the result of a debit card transaction. Many consumers naively assumed that if they didn't have sufficient funds in their accounts, their bank wouldn't approve a debit swipe.

You can speedily purchase gas at the pump using these methods as well. Buzzard stresses the need to follow the basics of smartphone safety. Finally, once again, credit cards in a mobile wallet are always going to be safer than using debit cards due to the legal protections. No matter how safe you are with your payments , the reality is that fraud is always a possibility.

In addition to watching where you use your debit card, spend an equal amount of energy watching the activity in your checking account.

How We Make Money. David McMillin. Written by. David McMillin writes about credit cards, mortgages, banking, taxes and travel. David's goal is to help readers figure out how to save more and stress less. Share this page. Bankrate Logo Why you can trust Bankrate. Bankrate Logo Editorial Integrity. Key Principles We value your trust. Bankrate Logo Insurance Disclosure. Read more From David. Maintaining a low balance in the account linked to the debit card you use for online purchases can help limit the size of fraudulent withdrawals should they occur.

This won't necessarily prevent someone from accessing your account, but it may limit the damage done. You may also want to disable any form of overdraft protection should you have it on the account used for purchases. Many banks offer this service usually on a checking account , which automatically withdraws from a savings account should the checking account be overdrawn.

In the case of fraud, this essentially means the crook has access to two accounts instead of one. If you do have overdraft protection in place, be sure to consult your bank on how and when it applies. Another way to limit your liability is to use a prepaid debit card. If someone does gain access to the account, they'll have access only to what you have loaded onto the card.

From a legal perspective, credit cards generally provide more protection against fraudulent activity. But, there are ways to mimic some of these protections with a debit or prepaid card. Deciding which is best for you will help protect your money whether you're spending online or swiping in store. How fraud is handled.

Debit card fraud. Are Debit Cards Dangerous? By a NortonLifeLock employee. For many people, debit cards have replaced checks or credit cards. Better Safe than Sorry The four riskiest places to use your debit card, according to Bankrate. Start Membership.