As we've been telling you, there has been a big drop in credit card spending over the last year or so. But in the wake of lower credit card usage, debit card usage is growing.

Banks have noticed.

In fact, banks are looking for ways to lure you into using your debit card even more often in the months ahead. Some banks are offering reward program similar to those they offer on credit cards.

Others are offering rebate programs that give you cash back when you use your debit card.

But we aren't jumping on the debit card band wagon. And we urge you to think about a few of the downsides of debit cards.

For starters, debit card fraud protection leaves much to be desired.

Second, banks make it far too easy to overdraw your account when using your debit card, causing you to rack up astronomical fees. (This will change as of July 1, 2010, but for now it's a real concern.)

Finally, there are some new-fangled debit cards we NEVER want you to use. Here are three types of debit cards you should avoid at all costs:

1. Prepaid Debit Cards

Pre-paid debit cards are one of the credit industry's fastest growing products.

They are easy to buy, easy to use and make some mighty big promises ("use me anywhere" or "safer than cash"). They certainly appeal to people who don't have a bank account or can't get a credit card.

In truth, prepaid debit cards are risky at best and an outright rip-off at worst.

Like other debit cards, these cards offer you little or no protection if they are lost, stolen or damaged.

Plus, many pre-paid debit cards are loaded with hidden fees that cost you a bundle.

Here's just a small sample of fees we've seen:

An activation fee-this alone can be as much as $9.95!

• A fee for each ATM withdrawal
• A fee for every purchase you make
• An inactivity fee if you don't use the card for a certain period of time
• A fee to call customer service or check your balance

It all adds up to big profits for the card issuer and big fees for you. Are you really willing to throw your money away in times like this?

2. Social Security Debit Card

More than four million people who do not have bank accounts now have the option of having their Social Security payments transferred directly onto a pre-paid MasterCard debit card.

The Treasury Department says this will be more reliable because there were 700,000 reports of lost or stolen checks last year. Of course, it also saves the government money by not having to mail the checks, and the government says it will save recipients from having to pay fees at check-cashing facilities.

So sign up if you're eligible, right?

NO!

If you do not have a bank account in which to have your Social Security check deposited, get to your local bank ASAP and set one up. Chances are you can establish a simple account with little or no fees. Have your Social Security check deposited directly into your account.

Believe us, this is a much better and safer way to get your benefits.

3. 401(k) Debit Card

Unfortunately, too many Americans use their 401(k) plans-the backbone of their nest egg-as piggy banks. Every 401(k) early withdrawals jeopardizes their retirement.

So what do the geniuses on Wall Street do? They make it even easier by offering 401(k) DEBIT cards!

No need to make that pesky call to you broker to withdraw your retirement money. Just hit your local ATM with your new 401(k) debit card in hand and you're off to the races. No muss...no fuss...and...

NO RETIREMENT!

Don't do it! You'll end up with a monthly bill that will include a minimum payment due (plus interest, of course!), a service charge and, probably, a fee or two to the card company.

Plus you get the headache of complicated taxes and potentially retirement-busting penalties. Don't touch these cards! (Still not convinced? Here are all the pitfalls of 401k withdrawal.)

Read More In: Credit Smarts Debt Management