Consumers who have high debts and are working to repair a bad credit history may be tempted to start making more purchases with their debit card than with credit cards. This can be a smart financial decision, as credit cards can have the downside of tempting a consumer into making purchases he cannot afford to quickly pay off. Unlike credit card purchases, debit card purchases take money directly out of a consumer’s checking account.
Debit cards also carry a significant risk of theft, however. While credit card thieves typically charge large purchases which they then attempt to resell, debit card thieves can have direct access to the cash in a consumer’s checking account, according to Consumer Reports.
They often use a technique known as ‘skimming’, which involves setting up a machine that memorizes a consumer’s PIN and magnetic stripe information. Such machines are most often set up at out-of-the-way ATMs or certain gas stations by disgruntled employees.
Consumers who use debit cards to fund purchases may want switch to credit cards when filling up their gas tank, and may benefit from sticking to ATMs housed inside banks, which may be more safe.