Get Rid of Your Debt Card

David Trammel's picture

I knew this fact about debt cards, most don't have a limit on the amount of fraudulent charges you are liable for but it took this article by the man who the movie "Catch Me If You Can" to make me rethink my constant use of that same card.

‘Never, ever use a debit card,’ warns fraud expert and ex-con artist—here’s what to do instead

"If there’s a large data breach (and you know that there will be) and a criminal does somehow get my credit card number and charges $1 million on it, I’m protected and my credit card company will cancel the card and send a new one within the next couple of days. I won’t be responsible for any purchases made. If the same thing happens and the criminals get my debit card information, however, I could lose the money in my bank account and have a difficult and lengthy time recovering it. Also, keep your check-writing to a minimum and be vigilant about examining your bank statements frequently."

Something to think about.

I knew cards' data is very insecure and easy to steal. I worked at a store that got hit by fraudsters that had a card with different data on the magnetic strip than that impressed into the plastic. That was a few years ago; luckily the US is finally catching up on chip cards.

What I hadn't realized is that it's hard to recover funds from checking accounts lost to fraud. I'll def be reorganizing my accounts now, so thanks for posting this.

The article also brings up but doesn't address something that has been on my mind a lot lately. There have been more and more data breaches in the past few years. So far I have been lucky. The websites that have been hacked either didn't have my data, or were hit before I signed up for them. There is one (known) exception, but apparently all they got was my email address, which was sold to spammers. Knowing that these attacks are only going to become more and more common, what can we do to protect ourselves ahead of time?

Thinking about this a bit more, I have to wonder how feasible it is to not have a debit card at all. For one, I expect many banks would automatically make a new one if you've reported your old card lost or missing. Second, in my experience it would be inconvenient to the point of impossiblity to get cash without one. Somehow banks get away with being the only non-government buildings which are only open during the hours that most of us are at work. Unless you're lucky enough to have a bank that's open for 4 hours on Saturday. Thus we're forced to use ATMs to get cash.

For me the best option in this situation seems to be: 1. Keep most money in a savings account. Make most purchases with credit card and pay down credit card completely each month by transferring from saving. 2. Have a small amount in checking, just in case. 3. Have a debit card, but keep it in a secure location and only use it when withdrawing cash. 4. Make sure there is no overdraft protection system in place to insulate savings acct in case of checking acct being hit by fraudsters.

My husband and I don't use debit cards. I generally know what our expenditures will be each week and withdraw the cash from our checking account. We also have some cash stashed in a safe place in case of an emergency. We do have credit cards but use cash a lot for everyday expenses. We have also gotten discounts from our electrician and others for paying cash. Most places will at least deduct the fee they would have paid to the credit card company.