When is it smarter to use a credit card versus a debit card? And what items should you NEVER use your credit card to buy? The answers may surprise you!

1. Renting a car: should you use credit or debit?  

Best choice: Credit card

Why it’s best: Here’s a quirky fact: Did you know that using a debit card when you’re renting a car can actually LOWER your credit score? It’s true.

In fact, it happened to me. At a car rental company, I used a debit card in Tucson Arizona while I was on business. I thought I was doing the “responsible” thing by paying with a debit card — and not using credit – in order to pay the bill.

Little did I know that when you use a debit card at a car rental agency, they have the right to pull your credit report!

When they did, it generated a hard “inquiry” on my credit report and lowered my credit score by 14 points. The lesson: always read the fine print … and sometimes it can pay to use credit over a debit card.

2. Buying merchandise online: should you use credit or debit?

Best choice: Credit card

Why it’s best: Even though both credit and debit cards offer pretty strong protections, federal law gives even more protection to credit card holders. You can dispute charges, which isn’t possible with debit card purchases. You’re also responsible for no more than $50 worth of bogus charges, in the event that someone fraudulently uses your credit card.

Depending on when you report the fraud, you could be responsible for $500 or more worth of unauthorized charges made with your debit card, based on fraud protection laws for debit card users.

3. Low-cost meal purchases (think: your lunch at McDonald’s, your morning coffee and breakfast at Starbucks or Dunkin Donuts): should you use credit or debit?

Best choice: Debit card

Why it’s best: One of the advantages of using debit cards with lower-priced items is that debit cards have no automatic overdraft protection. (You have to opt-in specifically for overdraft coverage … and if you do, you pay a fee for it, which is why most experts like myself say you should NOT opt in for overdraft protection).

So if you don’t have the money in your account for that $5.00 Happy Meal, your purchase won’t be approved.

By contrast, if you use a credit card and you go over your balance, you could get charged a $25 to $35 over-the-limit fee — just for making a small $5 or $10 purchase. That’s totally not worth it.

4. Hotel stays: should you use credit or debit?

Best choice: Credit card

Why it’s best: Hotels often do something called “blocking” where they’ll block off a certain amount of money that your TOTAL hotel bill is expected to be.

So let’s say you have a four night stay panned and the hotel costs $150 a night. The hotel might block off $600 – or more – in anticipation of your bills, and to cover themselves against people who might skip off without paying.

If a hotel did this and you used a debit card, your balance in your checking account would be reduced by $600 because you don’t have access to funds that are blocked off by a business.

While that money is blocked, other checks could come in — and you could accidentally end up bouncing checks all over the place. To avoid that scenario, pay your hotel bills with a credit card, not a debit card.

Now, here are 5 things you should NEVER buy with a credit card:

– Your “dream” wedding

A 2012 survey from The Knot shows that the average wedding now tops $27,000. Getting hitched costs even more in big cities like New York: nearly $66,000.

It’s one thing to put certain wedding costs on a credit card, or a single item, like the limo rental, and then to pay off the bill in full the next month.

But some couples determined to have a lavish wedding – or just a wedding they can’t afford – resort to putting ALL their wedding costs on a credit card.

This is a bad move at so many levels.

For starters, using credit instead of paying with cash tends to make you overspend. You buy higher priced stuff and more stuff as well.

So if you’re paying for your wedding dress, flowers, rental hall, the wedding dinner etc., all with a credit card, you’re racking up an enormous amount of bills that you may later regret — or have difficulty paying off.

But the biggest problem with charging your wedding (and your honeymoon) is that you’re starting off your married life in debt and creating financial stress for yourself and your spouse. You don’t want to cause money problems right off the bat, especially when financial difficulties often contribute to divorce.

– College tuition and fees

In a pinch, paying for your or your kid’s college tuition bill might seem like a good idea. But it’s a financial disaster waiting to happen if you don’t pay the bill off immediately. That’s because the cost of a college education is skyrocketing.

Public school tuition plus room and board for undergraduate students now averages between $17,000 and $30,000 a year, depending on if you’re an in-state or out of state resident. Meanwhile, tuition and fees at private schools range between $28,000 and $38,000 annually, according to the College Board.

Bottom line: you’ll rack up some serious finance charges if you put college tuition on your credit card and fail to immediately pay off the balance in full.

The average credit card has an interest rate of roughly 15%, while federal student loans are 6.8% and less. So in the long run, you’ll wind up paying a lot more in interest by charging college payments. You would’ve been way better off getting a student loan.

– 3 of your vices (gambling, pornography and drugs)

Believe it or not, experts at betting apps UK companies guarantee that many credit card companies track your purchases and keep tabs on what you charge.

Some credit card issuers have been known to decline charges when customers have tried to use their credit cards in casinos, to buy online pornography or even to get medical marijuana (even in states where the marijuana is legally sold by a licensed distributor).

So don’t charge any of these things on your credit card. And before you fork over plastic, always consider whether it’s best to pay with credit or debit.