You Used Your Debit Card to Pay for Gas, an Appliance, a Rental Car, Reserve a Hotel Room or Anything Online
Buy a coffee at Starbucks with a debit card and $2.01 will be deducted from your checking account--end of story. But fill up your car for $30 and the gas station might put an $80 "hold" on your checking account for a couple of days until the station reconciles its accounts and transmits your purchase to the bank. While that money is locked up, you can get hit with overdraft charges for subsequent purchases--even if you have enough money in your account. The worst move is to check in to a hotel with a debit card but pay the bill with a different card. The debit-card company might keep the hold for as long as 15 days, unaware that you paid with another card. Spend four nights in $250 hotel room, and, when the phantom incidentals are added in (a hotel might tack on an estimate for anticipated minibar or room service charges to the "hold"), you could lose access to $1,100 of your own money for half the month.
Solution: Use a credit card--which also comes with protections such as extended warranties, travel insurance and the ability to withhold payment if you don't get what you paid for. Just remember: As found in an experiment at MIT, people using credit seem to be willing to pay far more than they would if they use cash. If you're already carrying a balance, you may be paying the equivalent of an overdraft fee every month in interest charges. In that case, your best bet is to cut up the cards and stick to debit until you've paid off your entire balance.
