5 places you should never use a debit card

5 places you should never use a debit card

Picture this: A parent signs their kid up for summer camp and puts the $1,300 deposit on a credit card. A few days later, they notice the rec center charged them twice. One tap in the card app to dispute it, and the extra $1,300 charge goes away. Had they used a debit card, that second $1,300 would’ve come straight out of their checking account — the one they use to pay rent and bills.

That’s one of the key differences of using a credit card vs. a debit card; they’d be chasing down their own grocery money instead of flagging a charge on a bill they hadn’t even paid yet. Below, Motley Fool Money shares more differences between credit and debit cards, plus five places to never use a debit card.

Key points

• Federal law caps credit card fraud liability at $50; debit card liability can reach your entire account balance if theft goes unreported for more than 60 days.
• Americans earned $47.5 billion in credit card rewards in 2024, nearly double the $24.7 billion earned in 2020, according to the CFP.
• Online shopping accounts for nearly half of all debit card fraud reports, per FTC data, making it the single largest fraud category by payment type.

Credit cards vs. debit cards

At the checkout, these two pieces of plastic feel identical, but the safety net behind them is not even close.

With credit cards, federal law caps your liability for unauthorized credit card charges at $50, and many issuers waive even that. Debit cards play by different rules. If you report a stolen card more than two days after it was stolen, your liability jumps to $500, or your entire balance after 60 days.

A credit card can also earn you rewards. Americans earned $47.5 billion in credit card rewards in 2024, nearly double what they earned in 2020. That's about $228 per cardholder — enough for a month of groceries or a nice date night. Debit cards earn you nothing.

With that stronger fraud protection and real rewards, here are five places to always use a credit card instead of a debit card.

1. Gas stations and convenience stores

Gas pumps are prime hunting grounds for card skimmers. These are tiny hidden devices that grab your card info the moment you swipe.

The FBI estimates that skimming costs consumers and financial institutions more than $1 billion a year. With a credit card, fraud is a temporary headache on a statement. With debit, a thief can drain your checking account before you even notice, and it can take weeks to get it back.

When you're filling up your tank or popping into a convenience store for a road snack, use a credit card with gas rewards. You can earn 3% to 5% back, plus keep any fraud risk off your checking account.

2. When booking travel

Debit cards are a poor fit for flights, hotels, or rental cars. Credit cards simply do too much for travelers to pass up. Here's why they're a no-brainer for booking travel:

• Built-in protections: Travel cards often include trip insurance, rental car coverage, and reimbursement for lost baggage.
• Bigger rewards: Many travel cards pay 5 times or more points when you book through their portal, which can shave money off the cost of a trip.
• Extra perks: Some cards go even further with hotel upgrades, airport lounge access, or credits toward TSA PreCheck®.

Another small inconvenience with debit cards: Hotels and rental agencies usually place holds on your card, and those holds can sit for several days even after checkout. On a debit card, that locks up your own money. On credit, it's just a temporary hold on the issuer's dime.

Even one trip a year booked with the right travel card can be worth a few hundred dollars in value. A $1,000 flight booking with the right credit card can earn 5,000 points — worth about $75 towards future travel.

3. Shopping online

Sketchy websites are everywhere. But even legitimate sites get hacked, so it's always a bigger risk to input your debit card number.

Consider what can happen when someone pays on a sketchy-looking discount site with a debit card. Once the card number is compromised, fraudulent charges pile up before anything is noticed. The bank may eventually refund the money, but the account gets frozen for days during the investigation. That’s real money, not a pending charge on a future bill.

The data points in the same way. Among 2025 fraud reports where people paid by debit card, nearly half involved online shopping — the single biggest category. With debit cards, your real money disappears until the bank sorts out any fraud disputes. Credit cards provide a much better buffer, and many issuers offer virtual card numbers for safer checkout.

4. Buying big-ticket items

Sometimes an expensive purchase breaks in month 13 — right after the 12-month warranty expires.

That's one reason why big purchases make more sense going on a credit card, if they can be paid off when the bill comes due. Many cards extend the manufacturer's warranty by an extra year, so a defect that shows up late isn't automatically on you.

Then there's theft and damage protection. A lot of credit cards add purchase protection that can reimburse you if something gets stolen or broken soon after you buy it. Debit cards carry none of that — no purchase protection and no extended warranty coverage at all.

5. Bars and restaurants

Let's say you're out at a trendy new taco joint for happy hour. You hand over your debit card, the server walks off for five minutes, and your card is out of sight the whole time. In a busy restaurant, that's all it takes for someone to skim or clone it.

It doesn't happen every day, but when it does, debit cards make the fallout worse — the money comes straight out of your checking account. Freezing a credit card takes seconds from a phone app the moment something looks off — and the money at risk isn’t sitting in a checking account. Plenty of dining rewards cards pay 3% to 4% back at restaurants as well, so the safer choice comes with an additional perk.

The bottom line

That camp deposit scenario is a clear illustration of why credit cards carry less risk. On a debit card, the disputed amount would've been locked up in a checking account for days or weeks.

Debit cards have their place. ATM withdrawals and secure payment portals where a surcharge is otherwise unavoidable.

But almost everywhere else, a credit card is the smarter tool these days. It carries less risk and more rewards on just about every purchase.

FAQs

Is it safer to use a credit card or a debit card for online purchases?

A credit card is safer because the protections are significantly stronger than those of debit cards. Your liability for unauthorized credit card charges is capped at $50 (or often $0 with many issuers), and the charge is added to your bill rather than pulled directly from your bank account. With a debit card, the money leaves your checking account immediately and you have to wait for the bank to return it.

What happens if someone steals your debit card number?

The money can come straight out of your bank account, and how much you are liable for depends on how fast you report it. You owe up to $50 if you report within two business days and up to $500 up until 60 days. Wait any longer than that, and you could be on the hook for the entire amount lost.

Does using a debit card affect your credit score?

No. Debit card activity is not reported to credit bureaus because you are spending your own money, not borrowing. That also means a debit card does nothing to build your credit history, which is one more reason responsible credit card use can pay off over time.

This story was produced by Motley Fool Money and reviewed and distributed by Stacker.