Dreamhost, my web host incidentally, mistakenly billed their customers for a whole year of service in advance. Fortunately my credit card on file was expired so I was spared, but others were not so lucky. Some customers were billed thousands of dollars against their checking accounts which caused everything from overdraft fees to missed mortgage payments and lower FICO scores.
What this says about Dreamhost’s competence is a topic for another post. What you need to take away right now is a simple personal finance lesson in two parts:
Never, ever, ever use a debit card for recurring bills (or anything else if you can help it). In the event of fraud or billing mishap, BAM! the money is missing from your account and it’s a real pain to get it back. This opens you up to overdraft charges and inability to pay your bills, all of which hurts your credit rating.
Always use credit cards because your credit card company has your back. Credit card companies may seem like EvilBigCorp, but when it comes to dealing with fraudulent charges they are on your side. Charges don’t come right out of your bank account; you have time to notice and dispute them. An extra bonus is that your credit card company will go to bat for you if you do purchase something but it’s doesn’t live up to its promises. For example, if you’re planning a wedding, don’t use checks or your debit card because your vendors will automatically have you over a barrel. Use a credit card instead because then you’ll have a 600-pound gorilla in your corner to dispute charges.
My favorite card is American Express because when my wallet was stolen in Barcelona AmEx saved my butt with a replacement card the next day. AmEx also automatically extends manufacturers’ warranties by 1 year for free so you’ll never need to buy those bogus extended warranties.
Of course all of this advice assumes that you’re not a shop-aholic. Remember kids, always pay your balance in full. Credit cards are like firearms: useful in case of zombie apocalypse, but easy to blow your foot off with.
