What You Should Know About Using Your Debit Card Online
A Scary Sunday Afternoon Phone Call
A few weeks ago I got a strange phone call from the fraud division of the bank where I have my personal checking account. It seems that someone had charged over $600 to my debit card in Sweden.
Sweden of all places! Now I’m sure Sweden is a very nice place to visit, but I live in the United States and I’ve never been there, let alone charged anything to my debit card there.
I Had Become the Latest Victim of Identity Theft!
Since the bank is closed on the weekend, I was waiting at the front door of the local branch of the bank the next morning when they opened.
After the bank officer that I talked to verified my identity, she asked me if I ever make online purchases on my debit card. I told her that I usually try to pay by Paypal, but when that’s not an option, sometimes I pay with my debit card.
There’s a Safer Way to Pay Online.
She told me that I should never pay online with a debit card, and should try to always use a credit card instead.
Seems when you get hit with a fraudulent charge on a credit card, you are only responsible for the first $50 at the most, and if you inform the company that issued the card soon enough, you owe nothing. They simply cancel your card and issue a new one.
On the other hand, a debit card represents your cash money in your checking account. I had to cancel my account, cough up $200 to open a new checking account, and wait over two weeks for a new debit card and the bank to reimburse the stolen money to my new account.
I didn’t even have access to the $200 in my new account except by writing a check, and who takes those these days?
Protect Your Hardearned Money!
If you make purchases online, and you can’t pay by Paypal, at least try to use a credit card, never your debit card!
You can also sign up for identity theft protection with a company like LifeLock or Identity Guard, but a cheaper alternative might be checking with the insurance company that carries your homeowner’s insurance. They can usually give you an optional endorsement that will cover identity theft, sometimes at a much cheaper cost.
Have you had a similar experience? How do you protect your identity?
Steve
Gurwinder Singh B... (1)
Hey Steve,
Wow man, I was actually victim of card cloning (debit card) not long ago and I always thought that using a debit card would be safer than using a credit card since once the money runs out, they can’t keep stealing.
At least that was my logic.
Now I always have one credit card on my paypal account and that’s it.
I try to keep the rest of my cards completely off from the online world and the one with the biggest credit limit, doesn’t even goes into ATMs.
Sergio
PS. Sweden? Damn that’s FAR! My robber was in Phoenix and I even thought about going there and looking out for him personally but I’m not that kind of person so I just let it be, besides I got my money back!
PPS. I wrote a detailed article of this event on my blog.
Sergio Felix recently posted…Productivity Hack: The Lockdown Method
Hey Sergio,
Sorry to hear you had to go through that. I think the most irritating part about mine was I couldn’t access my money for a couple of weeks.
When I went to the bank, the transaction was still pending, but the bank officer said that according to U.S. law, they had to pay it even though it would overdraw my account.
Around here, almost everybody uses debit cards for gasoline, groceries, etc. I always seem to get rid of any cash I have, whether it’s 10 bucks or a hundred.
I’ll check out your article, thanks man.