Protecting Yourself: Online and Automatic payments

I worked as a customer service representative for several years and there are two things that I learned to avoid at all costs.

The first is setting up automatic payments to debit a checking account. I avoid automatic set ups anyway but when they're required I put them on my card.

There have been a number of times when for whatever reason, my company or the vendor who processed our payments would double charge, place "holds" or charge irregularly forcing a customer's account to become overdrawn. With credit cards, the customer can dispute the charge the credit card company will almost always reverse any overdraft charges or interest.

With bank accounts it's not the case. I've even called banks and directly requested that they reverse the charges for overdrafts that were our mistake. Most of the time they just say, "Sorry," and not like they mean it. Since my company didn't technically charge the overdrafts, I basically had to turn around and say the same thing to my customer.

Banks are also much worse about disputing charges to begin with, which brings me to item number two: Never buy merchandise online with a debit card or checking account, especially if it's not a major site like amazon or paypal. Your information can be stolen or the company (through no fault of it's own) could charge you incorrectly. Once that money is gone you are pretty well screwed unless the people who took it are willing to refund. And even if you can recover the cost of the charges, you will more than likely be stuck with overdrafts.

Credit cards are in a much better position to argue on your behalf if there is a dispute because they have standing agreements with the merchants. Checking accounts on the other hand, exist for the sole purpose of giving your money away never to be seen again.