The holiday season is upon us, and that means you’ll likely spend a little more money than usual. So, whether you’re buying gifts for loved ones or booking flights to travel home, which type of card should you use? Debit or credit? Let’s take a look at the differences, and when it may be best to use each.
What’s the main difference between using a credit card and debit card to make holiday purchases?
When you use a credit card, you’re borrowing from your card provider, such as Quail Creek Bank. You can spend up to your credit limit and pay back what you spend in full within 30 days, or make monthly payments (with interest). On the other hand, when you use your debit card, you’re using only the money available in your checking account.
Reasons to use your credit card during the holidays:
- You want enhanced fraud protection. If you report a lost or stolen credit card, your maximum liability is $50 – and most credit cards come with 100% fraud protection. Additionally, the credit card networks allow up to 180 days (and longer in some instances) to file a dispute on most transactions.
- You want to make online purchases. While fraud is prevalent at any time, it occurs more frequently during the holidays. So, if you plan to purchase gifts online, use your credit card. You’ll experience more protection and easier purchase cancellation.
- You’re required to make a down payment for a purchase or travel. If you’re required to put money down for a purchase (with delivery later), you should use your credit card. That way, if anything goes wrong, you’ll be protected. Additionally, if you plan to travel, use your credit card to secure hotel and rental car reservations. In many instances, a hotel or rental car company will require additional funds to be placed on hold if you use a debit card. For example, a rental car company may hold up to $400 on your debit card (in addition to a payment already made) until you return your car. If you use a credit card, the hold amount may range from $100-$150.
Reasons to use your debit card during the holidays:
- You’re on a holiday budget. You’ll spend the money you have available in your checking account when you use your debit card. In the long-run, you’ll be glad you spent within your means.
- You can stop fraud instantly (or close to it). While a debit card doesn’t offer the same protections as a credit card, you can still protect yourself from fraud. Set up alerts to notify you when your checking account balance drops below a specific amount, or when your debit card is used. And, if you have fraud protection on your debit card, you may receive a call from a representative before fraud even occurs. Once notified, you can suspend your card or close your account.
The holiday season should be a time of joy and fun, not stress and debt – or dealing with fraud. Be wise when you use your credit card or debit card. Shop only at reputable stores – whether online or in person. And be diligent in monitoring your accounts.
If you notice any unauthorized transactions on your Quail Creek credit or debit cards, contact us immediately.
