Just in the United States, debit cards accounted for over $1.15 trillion in purchases in 2011. It is predicted that over 65% of all purchases will be made with debit cards by the year 2013.
Debit cards are here to stay. But just how safe is your debit card? Is it as safe as using your credit card?
Debit Card Loss and Fraud
Banks might not be quite as forgiving on your debit card (compared to a credit card) if your number or physical card is lost or stolen. Also, keep in mind that the money is taken out of your account instantly in most cases, so your loss is immediate. When a credit card is involved, the credit card company has lost money, at least until you pay the bill.
- If your card has not been lost or stolen, but you have unauthorized charges or purchases, you have 60 days from receiving your statement to dispute the charges and get your money back.
- If you lose your card or it is stolen, you have 2 days to report it as lost or stolen. If you do this, your loss is limited to $50. If you fail to act, you could be on the hook for $500. If you wait too long, all the loss could be yours alone.
- Keep in mind that most banks are willing to do better than the above rules. However, banks have the option of setting more stringent rules than the ones above. Be sure to read the fine print before you open an account and get your debit card.
- If your card has not been lost or stolen, but you have unauthorized charges or purchases, you have 60 days from receiving your statement to dispute the charges and get your money back.
Use these strategies to keep your card and money safe:
- Review your account regularly. If you still get a paper statement, just looking at that once a month isn’t good enough. Get online and review all your purchases at least once a week. Investigate everything that doesn’t look like it belongs to you.
- Keep your pin number to yourself. No one else needs to know your pin number. The fewer people that know, the better. Be careful about who is watching when you use your pin number. Gas stations are notorious locations for pin numbers being stolen. Remember that you always have the option of using your debit card in credit card mode.
- Be careful with online purchases. It’s a lot easier to run a scam and remain anonymous online. Some security experts recommend only using credit cards for online purchases. At the very least, ensure it’s a secure transaction. Always look for the security symbol when buying online.
- Stick to the ATMs at a bank. Those independent ATMs you see all over the place are far more likely to be used by criminals to skim cards and numbers. Stick to the banks.
- Beware of public wireless access. The wireless connection in a public place is never a safe place for taking care of financial transactions. Avoid making any purchases or logging on to any bank, credit card, or other financial accounts. Assume someone can see and record everything you’re doing.
- Watch the security questions. Lots of people know your dog’s name, your mother’s maiden name, or your first car. Use your favorite car for your mother’s maiden name or your friend’s dog’s name for your first car. Your answers have to be consistent, not truthful.
- Review your account regularly. If you still get a paper statement, just looking at that once a month isn’t good enough. Get online and review all your purchases at least once a week. Investigate everything that doesn’t look like it belongs to you.
Debit cards have become very popular and will only continue to become more popular in the near future. Be careful how you use yours and where you choose to use it. The liability is quite small, provided you catch the issue quickly. Be smart with your debit card, and it will serve you well.
