6 On Your Side Answers: When should I use a credit card instead of a debit card?

KNOXVILLE (WATE) – It’s likely you have in your purse or wallet both a debit and a credit card. They look almost identical, but not all plastic is the same.

Peggy from Newport asks: “Are there certain times when I should avoid using my debit card?”

While debit cards do look like credit cards, debit cards work differently and are not always the best choice to make purchases under some circumstances.

Don’t use a debit card online, says the Credit Union National Association, because your debit card links directly to a checking account. If you have problems with the purchase or the card number gets hijacked, a debit card is vulnerable because it happens to be linked to an account.

If you are buying a big ticket item, purchase it with a credit card; it is safer. A credit card offers dispute rights if something goes wrong with the merchandise or purchase.

With a debit card, you have fewer protections.

If you have recurring charges, that’s another reason not to use your debit card. If you forget about the automatic payments and don’t have a cash buffer to protect yourself, you may face overdraft charges.

You have heard about the health club or gym that won’t stop billing an ex-members credit card, but imagine the charges aren’t going onto your card, but instead coming right out of your bank account.

If you book your travel with a check or debit card, they debit your payment immediately. So, if you’re buying travel that you won’t use for several months, you’ll be out the money immediately.

The same thing goes with buying now but taking delivery later offers. Avoid using that debit card.

If something goes wrong, a credit card offers dispute rights that a check typically does not.

Debit cards fill a niche. You see them used all the time, but they should not always be the first choice.

You can see Don Dare’s 6 On Your Side Answers every Tuesday and Thursday on 6 News at 4:00.

If you have a question you can send Don an email at ddare@wate.com or call his 6 On Your Side hotline at (865) 633-5974.


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