There is an advantage to using a debit card over a credit card?at least you?re only spending what you have and not charging and paying interest.
But using a debit card can cause some problems that you don?t get with a credit card.
For example, phantom charges. Phantom charges can show up when you use a debit card at a hotel or restaurant or even at the gas station. The merchant applies a hold to your account for a specified amount of money just to protect themselves, so you end up buying $10 worth of gas but the gas station doesn?t know how much you will actually buy and they also don?t know if you have the $10. in your account, so they put a hold for $75. on your account. It?s only a problem if you don?t have the $75 or if you spend more than the $75?then you end up with overdraft fees galore.
The merchants argue that they just don?t know how much you will spend so they are just protecting themselves?.however, you as the consumer never authorized a hold on your account?
If you didn?t sign up for the overdraft protection that was being offered every day last summer you could get your charges denied immediately with the exception of charges that don?t require a pin number?those don?t go through right away and if you don?t have the money you will be charged the overdraft fees. But it?s the same as with a checking account, if you don?t have the money, you shouldn?t spend it!
Of course, the best solution of all may be to just use Cash….except for that troublesome aspect of carrying around so much cash!
