If you're like many consumers, you may not be aware of the dangers of using debit cards at gas stations. Using debit cards is convenient because you don't have to worry about incurring additional debt or paying interest on the balance. Despite the numerous conveniences, using your debit card to pay at the gas pumps could cost you more than you're prepared to pay for gas.
Skimmers at the Gas Pumps
A skimming device has the ability to download your personal information. As you swipe your debit card, the device can obtain your account number from the strip on the back of the card and record it. It also has the ability to record your personal identification number (PIN) as you use the keypad to enter it.
There are numerous types of skimmers. With some types of skimming devices, you might receive a malfunction error. However, your your transaction will still go through. Other types of devices allow you to process your transaction without any interference at all. When in doubt, cover your hand as you enter your PIN number on the keypad, recommends BootsnAll.com. Thieves will have a harder time emptying your bank account if they don't have your PIN.
Thieves often look for public places, like gas stations, to install their skimming devices. There are also reports of gas station disgruntled employees who have used skimmers to get back at their employer.
Gas Stations and Frozen Funds
Some banks block a portion of your funds when you use your debit card to pay for gas at the gas pumps. The blocked amount can range from $1 up to $100, depending on the gas retailer. The blocked funds remain unavailable until the gas station runs the actual transaction amount. It can take up to 72 hours after you pay for the gas, according to MSN.com.
ATM Transaction Fees
It is not necessary to place a hold on funds when you use your PIN at the gas pump, as PIN-based transactions are processed immediately. You may choose to pay inside, where it's safer to use your PIN. However, some banks treat all PIN-based transactions as ATM transactions, which means that you may incur a transaction fee.
Although a pre-authorization message often comes up before you proceed with your transaction at the gas pump, if you're in a rush and don't read the message, you run the risk of having bounced checks. Some banks will not charge an overdraft or bounced-check fee if the blocked funds are released the same day that the hold is put in place.
Overall, using debit cards at gas stations could cost consumers much more than they intended to spend. Paying with cash for gas is an alternative. Some gas retailers even offer gas discounts to customers who pay with cash. If you choose to use your debit card to pay for gas, make sure you have enough funds to avoid bounced-check and overdraft fees. Always protect your PIN, whether you pay at the gas pump or inside the gas station.