Why Your Debit Card is the Wrong Choice for Online Holiday Shopping

With this Friday — commonly referred to as Black Friday — officially kicking off the 2016 holiday shopping season, there’s a good chance you’ll be spending some money this week. Plus if you’re like a growing number of Americans you’ll also be forgoing the typical mall madness and opting to shop online instead.

If you’re following our tips and trying to stay on budget this year, using a debit card to complete your purchases might seem to make sense. After all since debit cards are linked to your checking account and take money out directly, there’s virtually no chance of that dreaded January credit card bill surprise arriving. Unfortunately, while your heart might be in the right place, using your debit card for online shopping is often the wrong move. Here are three reasons why.

1) Fraud protection problems

The same thing that makes debit cards great for helping you stick to your budget is also what makes them really bad in the case of fraud. Because debit cards are linked directly to your checking account, any unauthorized purchases made could put you in a real bind. Additionally, although protections for debit card users have improved in recent years, the process of resolving issues can be longer and cost you more than with a credit card, especially if you don’t inform your bank right away. When you’re relying on that money to purchase your gifts, to travel home for the holidays, and to pay your normal bills, that extra time could lead to more money issues and headaches overall.

2) The perks you’re missing out on

Even if you’re not scared of fraud, perhaps there’s something else you fear that could be costing you money. As we discussed, no one likes overspending during the holidays and being greeted by a massive balance in the new year. While that’s the dark side of credit cards, the good side might be worth taking another look at.

Depending on the type of credit card you have you could save a significant amount of money in cash back and other perks just by using your card to shop with. In fact now could actually be a great time to look into applying for a rewards credit card for that very purpose. Of course you should still monitor your spending carefully and never fall for the trick of buying something just to earn cash back. 

3) Refund issues

Have you ever purchased something online only to receive a product that bears little resemblance to what you thought you ordered? Whether the result of shady businesses practices or honest mistakes that can be a symptom of the holiday hustle and bustle, you may end up needing to return an item you bought online and getting a refund. Similar to the fraud protection aspect, this wait for a refund can sometimes mean that your money is all tied up, preventing you from buying a replacement right away. And during the holidays when time is of the essence, that could be a major Scrooge in your plans.


Debit cards are great for a many number of things. Sadly shopping online is not one of them. As you prepare for this year’s shop-a-thon, consider using a card that will offer you greater protection —and perhaps even some perks on top — when making your way through your holiday gift list.

Author

Jonathan Dyer

I'm a small town guy living in Los Angeles looking to make solid financial decisions. I write for a number of finance websites, including HuffingtonPost and Business2Community. I founded DyerNews.com in 2015 to focus on personal finance and the emerging FinTech markets.

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