Clark Howard and Debit Cards

NewApp · Unread post by **NewApp** » Mon Jun 08, 2015 11:59 am

I'm a Clark Howard fiend although I take much of what he says with a grain of salt but I found this interesting even though I had read it elsewhere a few years back. But anyway:

Pay at the pump with debit is dangerous

If you do "pay at the pump" and you use debit, the gas station will put a giant hold of $100 to $150 or more on your card. You may only pump $20 of gas! But many times that hold won't be released for days, and your checking account reflects that $100 or more hold. If you bounce a check because of that hold, your bank won't cut you any slack.

So if you need to use a debit card, go inside and present the card to the cashier. I know that defeats the whole purpose of pay at the pump. But that's the only way to be sure you'll only be debited the actual amount of gas you pump, rather than the $100 hold.

The other disadvantage for debit card users is the plague of fake PIN readers. Criminals will put a device called a skimmer that is barely recognizable over where you put in your card. They use that to capture the transaction data from your card's magnetic strip. And then they have tiny digital camera to record your 4 digit secret code as you enter it.

Equipped with that info, the crooks can then duplicate your card and empty your checking account. When you complain to your bank, your bank treats you as the criminal. It's ridiculous.

So the reality is debit cards are not secure. Even more infuriating to me, as the banks rush to replace old credit cards with newer cards that have a chip, they are stalling on replacing people's debit cards. That's because the burden with a debit card falls on you, while the burden with a credit card falls on the bank.

I know lots of people love their debit cards, so just know there is a lot of hazard that goes with using one!

HkyMtneer · Unread post by **HkyMtneer** » Mon Jun 08, 2015 4:28 pm

NewApp wrote:I'm a Clark Howard fiend although I take much of what he says with a grain of salt but I found this interesting even though I had read it elsewhere a few years back. But anyway:

Pay at the pump with debit is dangerous

If you do "pay at the pump" and you use debit, the gas station will put a giant hold of $100 to $150 or more on your card. You may only pump $20 of gas! But many times that hold won't be released for days, and your checking account reflects that $100 or more hold. If you bounce a check because of that hold, your bank won't cut you any slack.

So if you need to use a debit card, go inside and present the card to the cashier. I know that defeats the whole purpose of pay at the pump. But that's the only way to be sure you'll only be debited the actual amount of gas you pump, rather than the $100 hold.

The other disadvantage for debit card users is the plague of fake PIN readers. Criminals will put a device called a skimmer that is barely recognizable over where you put in your card. They use that to capture the transaction data from your card's magnetic strip. And then they have tiny digital camera to record your 4 digit secret code as you enter it.

Equipped with that info, the crooks can then duplicate your card and empty your checking account. When you complain to your bank, your bank treats you as the criminal. It's ridiculous.

So the reality is debit cards are not secure. Even more infuriating to me, as the banks rush to replace old credit cards with newer cards that have a chip, they are stalling on replacing people's debit cards. That's because the burden with a debit card falls on you, while the burden with a credit card falls on the bank.

I know lots of people love their debit cards, so just know there is a lot of hazard that goes with using one!

Thanks for sharing but I've never had a $100 hold at a gas station and I rarely use anything other than my debit card(s). I'd say that, in all my travels, holds are only placed on any of my cards maybe 2 out of 10 times and usually never in excess of $20-ish. I only know of two places here in Hickory that have placed holds on my card (Wilco-Hess & Kangaroo/Marathon) and that hold is usually $26, why that amount I have no idea.

Apptiger · Unread post by **Apptiger** » Mon Jun 08, 2015 8:15 pm

HKY,
Companies that have pay at the pump typically have what is called a preauthorization process. When you swipe your card it will set up an automatically preapproved amount. Basically the system pings the switch (processor) for a fixed amount initially, then you settle up at the end of the transaction. They are mostly making sure your card is good and you can pay.

If the transaction is less than the preauthorized amount, you get a hold on the preauthorized amount.
$50 is a typical preauth amount, any more than that I am not sure I would shop there. Some release the hold pretty quickly, others may take days.
Just another reason not to use a debit card at the pump. I live in skimmer heavy Florida and stopped using my debit card to buy gas a couple of years ago.

97grad · Unread post by **97grad** » Tue Jun 09, 2015 8:02 am

I use a credit card for everything and yes, there typically a ~$90 authorization whenever I get gas.

BeauFoster · Unread post by **BeauFoster** » Tue Jun 09, 2015 8:56 am

If you are at all financially responsible, there is no benefit to you as a consumer with a debit card. I use a travel rewards card for every purchase, pay it off each month, and paid for about 3/4 of a 5 day trip to NYC this past spring with only 1 years worth of purchases. The fraud protection and free access to my credit report at any time is another plus.