Here’s a cautionary tale for those of you that prefer debit cards over credit cards… Earlier this week, someone at Dreamhost accidentally typed the wrong year into their billing software. The end result was a wave of inadvertent overbilling to the tune of more than $7.5 million.
Not only did this error annoy the vast majority of their customers, but it actually caused serious financial hardship for some. Indeed, although they’re refunding everybody’s money, those that had debit cards on file lost the money straight out of their bank accounts, and many ended up with overdrafts (read through the comments here). At least one customer even reported have their mortgage payment bounce because of this error. Not good. But for those that had credit cards on file, it was no big deal. Dreamhost restored the funds and life goes on.
So… It looks like my list of reasons that credit cards rock and debit cards suck just got longer.