Problems With Using Debit Cards at the Gas Pumps

Gas stations will ask your bank to put aside a set amount of money as soon as you swipe your debit card at the pump. Oil companies have no idea how much juice you're going to buy before you've finished filling up, so will have your bank freeze funds to cover your purchase. Some firms pre-authorize as much as $100, according to SmartMoney. Your cash can be frozen until the gas station you bought fuel from updates your bank with the actual value of the transaction you made. This can take as long as 72 hours. You won't be able to access the frozen funds during this time, so topping your tank up with $10 worth of gas could deplete your available funds by as much as 10 times what you actually spent.

Debit card slots on gas pumps are vulnerable to fraudsters who fit skimming devices. These collect your card data and PIN allowing criminals to make purchases with your details and clone your card. U.S. banks have been slow to introduce new technologies such as chip-and-PIN, which can make it more difficult for criminals to use cloned cards. This has helped make the U.S. the world's card-fraud leader, with 47 percent of all debit and credit fraud occurring in the county in 2011, according to a report from Nilson. Always inspect debit card slots at gas pumps before inserting your card. If you notice anything suspicious, use another pump or pay in-store.

Some banks charge a processing fee for using a debit card in PIN-based transactions. These charges can range from 50 cents to a dollar , according to SmartMoney. Although it may not sound like much, processing fees can soon add up if you fill your tank up regularly, adding to the cost of already expensive gasoline.

Paying with cash can get you a discount on your fuel at some gas stations. You can also take out credit cards that give you cash back on your fuel purchases. Some of these have high interest rates, so make sure you don't carry a balance if choose to use them.