No. Debit cards do not
- Build a credit history
- Provide fraud protection
- Provide additional warranties
- Protect against overdraft*
* A little-known fact of credit/debit cards is that when you use one, a hold is placed against some amount of money in the account. Gas stations will typically place a hold of $1 or $5 just to make sure the card is good, while restaurants and high-end retailers will hold the entire amount (restaurants often hold an additional 10% without even realizing it). This hold counts against your balance remaining, regardless of what the actual transaction is. By example... You have $200 in your checking account. You go to a restaurant, run a tab of $100, and use your debit card. Your initial hold is likely to be $110. Now let's say you're a big tipper, and tip 30%, so the transaction amount is $130. Unfortunately, the hold does not get automatically released at the same time the transaction is processed, so instead of being dinged for $130, you are actually hit for $240. HELLO OVERDRAFT FEES!!!