Debit cards are for withdrawing funds from ATMs, and depending on which card you’re using, you’ll usually get a more favourable exchange rate, but in many other instances you’re better off using a credit card.

When you check into a hotel or hire a car, the agent will usually ask for a card in order to put a stranglehold on some of your funds as a security deposit, known as a pre-authorisation.

The amount is typically several hundred dollars.

When you check out or return the vehicle the hotel or agency cancels this hold; however, the bank does not always release the funds straight away.

It can take several days for the funds to be credited back to your account.

If you’ve handed over your credit card that shouldn’t be too much of a problem, and contacting your card provider should fix it, but if it’s your debit card your available funds are reduced for the interim and you might find yourself caught short.

The re-crediting process takes even longer if you don’t use the same card for check-in and check-out.

Another reason to use your credit card, your transaction should earn loyalty points which can be redeemed for future travel or goods.

Finally, if your credit card details are skimmed or if your card is stolen, most credit card providers limit your liability.

If that’s happened against your debit card, chances are the loss is your problem.

Posted by Michael Gebicki – Traveller (Fairfax) on 11th August, 2015