The BBB has advice about whether it is better to pay for your holiday shopping purchases with a credit card or a debit card.
When you use your debit card, the money is automatically withdrawn from your checking account which limits your available cash. Whereas, when you make a purchase with your credit card, it reduces your available credit limit.
Most credit issuers have zero liability policies which will protect you from unauthorized charges, fraudulent activity or orders for products and services that you did not receive. Debit cards typically have limited liability policies which will require you to cover a portion of the lost funds.
“Debit cards are a convenient way to control spending since the money comes out of your checking account,” said BBB President Tom Bartholomy. “However, if you have unauthorized charges or buy gifts that you can’t return, you will have more difficulty getting your money back than you would if you had used a credit card.”
The BBB recommends using a credit card instead of a debit card for your holiday shopping. Vendors are often seasonal and could be gone in a month or two. If you bought something that broke, you would not be able to return it if you can’t find the vendor.
The BBB also recommends that you take these steps to protect your credit and debit cards when you travel:
1. If you are planning to make large purchases, you should notify your credit card company or bank to tell them or they could freeze your account thinking your card has been stolen.
2. Write your card numbers down before you go to the mall and the telephone numbers of your credit card companies and your bank. If your cards are lost or stolen while you are shopping, you will have the information to cancel them quickly.
3. Check your credit card and bank statements when you return to make sure there are no unauthorized charges.