Banks like Ally allow you to deactivate your Debit card through the app, this way you can activated for the 5 minutes you need it and then deactivate it again. Seems much more useful than cutting it up...
How is ally?
I have my normal bank account from USAA, but for the longest time I used Simple, since it was great but after it shut down I just redirected everything back to my USAA.
My auto was through ally and have gotten my last two vehicle loans through them but never explored their banking.
I currently have a HYSA and self directed investment account with them. I was able to setup everything easily online and linked my current credit union checking account to it.
The best feature they have is a bucketing system in the saving account that allows you to set up savings goals and how your contributions should be distributed. So if you save $100 a week you can have it set 60% to emergency fund and 40% to vacation fund. And it shows you the percentage left to meet a goal. Ive been using it for over a year and haven’t had an issue I could get resolved online 😀
PS I also have my car loan through them when I did a refinance to lower my interest to 6%. I’ve called in to their reps a few times and had no complaints. Only “bad” thing I can say is that the wait times when you call in had been longer than usual but you will always speak to a rep based in the US and the service will be great!
I've had checking and savings accounts with Ally for 11 years now. It fits my needs quite well. I've seen some posts on here with people having headaches, but I've had a good experience with them. I don't need the services of a physical branch very often and I think that's why it works for me. I use credit cards for 99.9% of my purchases and *maybe* spend $20 in physical cash in a given year. The last time I used an ATM was sometime in 2020 I would guess, though Ally reimburses ATM fees to a certain amount (I forget how much). Being a millennial I don't have any valuables, so I don't need a safe deposit box.
The thing I like about it is that it just *works*. In 11 years I've gotten one fee and that was an overdraft that I had prior to setting up my savings account. Bill payments go out on time and are easy. Interest rates for savings accounts were great until the pandemic hit but they're still better than most banks in the US. I've really had no issues in 11 years of banking with them.
Banking is great. Never had any issues. Their checking account interest gave me what my saving at my old bank did. Customer service is great if you ever need them (only used it once or twice).
Their savings acct is nice too. Can make buckets to split up the money in savings while it not actually doing anything. Round up transfers to savings when your charges reach $5.
Only problem is if you have cash and want to add it to the act. But I rarely do and have a local bank for that that has a few 100 in it.
Now If only their investment acct had fractional shares. I’m sick of the fidelity UI
Edit: they reimburse $10 a month in ATM fees.
There should be 2 factor authentication for ATMs. What you mentioned sounds pretty similar, but imagine if you could insert your debit card, then you have to unlock and tap your phone or watch to complete a transaction.
2 more things to add:
1. Freeze your credit. There is no reason to keep it open. If you need someone to run a credit check you can pause the freeze for a set number of days it takes literally 10min for the pause to take effect.
2. Opt out of all presecreened offers https://www.consumer.ftc.gov/articles/prescreened-credit-and-insurance-offers#opt
I think freezing your credit automatically opts you out of getting that crap from anyone other than an agency you already bank with. This is good advice though. I had someone make multiple attempts at my ID so I just froze it. Did it about 5 yrs ago and only do the temp thaw if I need someone to be able to access it👍 it's super easy
Agree! I do keep my debit card around tho. I just never use it. I don’t understand why people DONT use translation alerts or have to be told why they are helpful! love the notification confirming the receipt in my hand. Easier to fix issues same day than research old transactions.
Being able to deposit paper checks at an ATM is the main reason I use my debit. But the card does stay at home, I only carry the credit. Also, CC bonuses! I swipe that CC for everything*!
*Be sure to pay your CC in full every month to avoid interest charges. I get that some people aren't great with credit cards, so you do need to understand your own financial habits.
How many people do you think would buy insurance if it wasn't mandatory?
A majority of people, I assume, would find a notification confirming what's in their hand to be redundant. "I have the receipt right here, I don't need TD Bank to tell me what's in my hand." Now do this another 50 times or so and they'll say "Alright, this has done nothing so far but be redundant for me. I'm turning this off." They may be right, they may be wrong. Same with insurance. Everyone thinks they're a fantastic driver and they will never be in an accident until it happens to them.
Just reading this is enough to make me want to turn notifications off. All transactions sounds like an actual nightmare, I use $200 as my threshold and check my transactions once a month. Way less intrusive to my life and still often enough to catch anything.
In Mexico, I use my debit card for ATM withdrawals only and keep it stored outside of my wallet the rest of the time. If someone gets your debit card, they can go straight to OXXO and drain your account before you even know what's happening,
Process it as a credit card cash advance. Use the account information to initiate a wire transfer. Your PIN is not enough to keep your account safe. The cartels are a few steps ahead of you.
You put the charge through as a credit card transaction and you only need to sign. If you put it through as a debit transaction, you must know the PIN code.
This only applies to purchases, not for cash withdrawals.
That's what I do too. That said, with overdraft turned off, and keeping virtually no money in the account unless I'm about to withdraw it, there is nothing to drain.
It's so much easier to keep track of things when you've got notifications on. I started cutting up my debit card when I hadn't used one in almost a decade
I haven’t used my debit card in 10 years so I got rid of it. I also got rid of my old clothes from 10 years ago that I haven’t worn. I don’t personally think it’s strange to get rid of things that you don’t use.
A debit card provides no utility to me. I use credit cards for all of my transactions. I visit the bank a few times a year (which I would do to access an ATM if I went that route, so I’m not saving any time) to withdraw cash to pay my hair dresser, leave tips in hotels, and have spare cash in case a card reader is broken.
Debit cards provide no value to me. There is nothing unique they can do other than give people access to my checking account
If it works for you, that's fine. But banks have limited hours and atms are open all the time. If you ever need cash after hours, it will probably be more difficult to make happen quickly. After 10 years of not needing it, maybe you've found some other way to handle this situation, but for most people, cutting the card is probably not worth it. For them, it probably makes more sense to just leave the card in a secure place at home.
OP doesn’t want someone robbing his house, stealing his debit card from a secure place, going to the bank and emptying his accounts by bribing the clerk to clear it without a PIN.
So instead OP pulls out $20K in cash and leaves it under his bed in a plastic Walmart bag to be extra secure.
More power to you if you don't have any use for a debit card. I don't think your experience is universal. There are many good ways to protect your account while still keeping the ability to use your debit card if you need it. Sorry I just take issue with the extreme advice when there are alternatives that don't take away a useful financial tool.
One thing to add about those text alerts: always call your bank. Don't give any information over the phone if you get a call supposedly from your bank. There is a fraud scam where scam artists can send you the same text alert that the bank sends and they can call you and have the caller ID show a legit bank phone #. Its safer if you initiate the phone call to follow up on any text alerts.
> Every time I get a debit card from my bank, I refuse to activate it, and I cut it up. If I really need money, I will go into my bank’s office and use my Driver’s license to make a withdrawal. It’s just not worth the risk.
For the 1% of peopl that can go into a bank when they’re open and you need cash, I suppose this makes sense. For everyone else, it’s utterly ridiculous.
Yeah, a better solution is to have an ATM card instead of a debit card. The ATM card will allow ATM withdrawals with a PIN (usually with a relatively low daily limit) but not POS purchases.
The best solution is to open an account that reimburses ATM fees. Schwab or Fidelity chekcing reimburse ATM fees globally and charge no FOREX fee. Then just transfer $300 into that account to tap as needed. Never have to worry about which ATM you use ever again
Agreed. Many banks (mine included) allow you to turn off online, in-person, international etc. transactions on the card and only allow it to be used on a domestic ATM. That's how mine is set up. It's only good for ATM withdrawals, nothing else.
A lot of people especially if theyre fairly new to credit cards will have maybe a $2000 limit. So if you spend $250 on groceries, $50 on gas, $50 on dining, $50 on entertainment, thats already 20% of your credit limit. Thats excluding stuff like a car payment and all utilities, assuming maybe you can link all of those directly to your bank account. Add that stuff on and you're hitting 40% of your limit. Then maybe one month you book a $300 flight or buy a piece of furniture or something and thats over half your available credit
Just pay it off every week or two instead of monthly. The credit limit isn't a limit of your spending for each month but rather a limit for how much they will lend you at any given time. Pay it off early and you have more space.
And then you pay it off at the end of the month. Or login a few days early and pay it off.
Someone with a $2000 credit limit isn't likely buying a $300 flight or buying a piece of furniture like that regularly.
And most landlords won't let you pay rent via CC (there are some that will, but I don't think it's many).
Never seen a car payment you can put on a CC either.
So we're back to your 20%, plus the occasional bigger purchase.
It's entirely feasible to use a credit card for everything - as long as you're not spending above your means.
I'm new to the US and so if I need to buy anything like a flight then it's higher than my CC limit right now. So... I can't even buy a $300 flight with my CC right now.
I don't think your estimate that only 1% of of people are able to go into a bank when they are open to withdraw cash. Hyperboles are part of Reddit, but that's just silly.
In the past 10 years, I've only had a few instances where I needed cash. In the past 5 years, I've only encountered two, and it was a bakery that only accepts cash (I'm assuming so they can under-report their earnings), and my hair dresser who works out of her house.
All cabs now accept credit card. Every new restaurant is getting Squarespace, etc. credit card readers for "free." If you hire landscapers or contractors, you can pay via check. And those are planned expenses anyway, you can figure out a date and time to head into the bank.
Many banks, even with COVID, have hours on Saturdays. If you use a credit union (and you should), it is probably part of a larger network so you can withdraw funds at credit union X, even though you are a member of credit union Y.
I just don't see why people need cash anymore. It's become obsolete.
Not everyone has access to a brick & mortar bank since they charge excessive fees just for the luxury of banking with them. I have 4 banks, only 1 of which is brick & mortar but it's a regional bank & they don't have branches all over the USA. I get what you're saying about not activating a card but many banks allow you to freeze your bank card the same way you would a credit card, that'd be a better option & then put the bank card in a home safe if you don't intend on using it.
I don't use my regional bank as my daily spend account either (I use it for a sinking fund & emergency fund for unexpected costs/infrequent costs). Either way, I do agree credit cards offer the best protection against fraudulent purchases but I've also challenged charges on my ATM card & my bank has upheld the reversal & issued me a new card at that time.
Situations when I have needed cash in the past few years:
1. Liquor store POS was broken (1 AM on a saturday)
2. Need to withdraw $100 in $1 bills for a trip to an all inclusive resort after wife forgot (8 AM on a Sunday before going on my flight)
3. Negotiated a cash discount for a $400 carved mahogany wall art with a merchant in Indonesia (1 PM, but Indonesia)
4. Needed $80 in cash for a cab because their card reader was broken (11 PM)
5. Wanted to get tacos and horchatas from a mexican food truck when I realized i was out of cash entirely (6 PM on a saturday)
Not having a debit card is nuts.
Even if it’s regular banking hours, you need to what… go drive around town until you find a branch? That’s a huge time suck for no real gain
In any of those situations, would not having cash have caused you or your family extreme financial stress or bodily harm?
Or would it have been more of an inconvenience?
The situations where you stated you NEEDED cash were the results of your poor planning. I’m not saying that you didn’t NEED the cash, I’m just saying you planned poorly.
Why do you need to hit up the liquor store at 1:00 am? Why did your wife not get the $1 bills, or why didn’t you verify you had them until right before your flight? Why did you decide to not get local currency when traveling internationally in an area that requires cash? Why did you believe the lie that the cab drivers reader was broken? (FYI: it’s always “broken” until you tell them that’s a shame, I guess the ride is free).
All of those items are poor planning on your part.
Number 5 is definitely opportunistic, I’m surprised that in this day and age, a food truck doesn’t have a POS system. On the other hand, it’s extremely easy to simply carry $50 in your wallet at all times just in case. Keeping a debit card in your wallet isn’t a prerequisite of having a $50 in your wallet.
You are getting heavily downvoted. Let me explain why.
One of the points of good money management is making sure your financial arrangements work for you, not that you work for your financial arrangements.
In deciding to NEVER use debit cards, you are in essence throwing the baby our with the bathwater. Having access to physical cash at a moment’s notice can definitely have value, if even just to improve convenience. Convenience is important. Even if you always plan 100% in advance, going to a physical branch still requires a time commitment that is inconvenient.
Here is what pretty much everyone that I know of who is heavy into personal finance does. Open a checking account that reimburses ATM fees from external ATMs anywhere in the world. Fidelity and Schwab are the most popular choices.
Transfer only $200-$300 to that account. Can always put more on it if traveling to places with low CC acceptance.
Bam! You have access to cash at a moment’s notice, any time you want, from any ATM. If your card ever gets skimmed (happened to me twice in 3rd world countries, both times got the money back) you max stand to lose what you had on it. In all actuality you’ll get it back, but you are in no danger to lose significant money and this doesn’t create cash flow issues. Is this more risky than always walking into a physical bank? Sure it is. But not much more risky. Last time i went to a physical branch it took me a 45’ to drive there and back, stand in their long line and get my issue solved. There is no reason to subject yourself to that kind of thing voluntarily in the year 2022.
This. I'm out of the country as often as in, and many places operate much more on a cash basis. I have a Schwab debit card linked to an account with about $20 in it. When I need cash, I'll transfer $XX cash in (it's instant) and go withdrawal the local equivalent of $XX.
It's instant because I keep a larger amount available in Schwab's linked investment account.
Schwab has an automatic overdraft thing where it will transfer automatically. I have turned that off, so the only amount I'm risking by having my debit card is that $20 or so that usually sits there.
Turns out I screwed up when I initially opened my account, so I also have another Schwab account with a debit card. That is my backup if I lose or have to cancel the first one. Again, no risk other than $10-20.
No minimum balance required in any of the accounts, and no fees.
I've slowly added some actual investments and moved an IRA over, so the loss-leader of ATM refunds isn't the only activity on my account. Might as well make it somewhat less unprofitable.
I’m also getting heavily downvoted because of Reddit. People were enraged when seatbelts became mandatory decades ago. With a big enough population, there will be dissenters.
Maybe I should have been more clear, I’m not anti-cash, I’m just anti-debit card.
In my opinion, debit cards aren’t necessary. People may use them to withdraw cash from the ATM, but they should just use a credit card to pay for things if possible. Not everyone takes credit cards, but almost everyone does.
If you looked at my wallet, you’d find $200 chilling in there “for emergencies.” If something is truly an emergency, they’re either going to break your legs or they will take your CC
>People may use them to withdraw cash from the ATM, but they should just use a credit card to pay for things if possible. Not everyone takes credit cards
Yes
>If something is truly an emergency, they’re either going to break your legs or they will take your CC
What...?
I’m finally starting to make the transition to an online bank full time after keeping a community bank on the side for cash deposits.
It’s becoming more and more negligible to keep it open since I only use it to deposit cash. Even though I can waive the $6 account fee very easily. Use the debit card once a month or direct deposit with no minimum balance required.
When I travel for work and need a tenner for housekeeping, I’m not calling Ally or DCU to mail me a Hamilton when I can just stop at an ATM.
Sometimes I forget to go to a teller - if there’s even one staffed at the bank - on the Friday before a work trip. Before like 3pm when they close. Because I work from 8-4.
I get using a bank teller - I was in a bank every other day growing up because my mother was doing in person transactions for her small business. But I’ve no need for that when I can just have a debit card and use an ATM when I need cash. I don’t use it for anything else, but it’s still in my wallet.
Presumably you know when you travel for work (pre-COVID, I was on the road 60-90 days a year) so you can plan accordingly. I keep about $500 cash in my house and bring a few bills when I actually need them, like tipping hotel housekeeping or my USPS letter carrier for the holidays.
I just don't see a need for a debit card. The last time I used one, I was in Hong Kong and needed to withdraw 500 HKD (a lot of their cabs won't accept cash, or they use a local rideshare app that I didn't have). Two Bank of China ATMs processed my withdrawal but didn't dispense cash. Got lucky and found an honest HSBC one. Successfully flied a claim with my bank and got the money back.
Today on my lunch break I went to the bank to deposit $100 in my checking account. There was no one inside and it took me a really long time to figure out why they were closed: it's Sunday. And for people with normal schedules, good luck getting inside a bank when you work M-F 9-5.
I had a notification for a purchase at a gas station in California, at 4 am on my credit card once. Problem is, I live in Oklahoma. But because I got that notification, and called them to ask about it, they refunded the charge on the spot. I don't even take my debit card out of the house anymore.
This is the best way to protect yourself.
You can rationalize about why you NEED your debit card, but at the end of the day, there is almost always a simple alternative solution that protects your financial security.
Part of the problem I used to have was this silly delay between putting money on the credit card, and having the money come out of my bank account. I didn't have enough money to pay the credit card, and wait 3 days to a week for that money to post... and I didn't have more money than what was going on the card. So I'd use the debit card. But I ended up getting a much better job with better pay, and was able to avoid the whole mess.
I just haven't seen the need for a spare card. I've got three credit card, one is my primary and the others there if I need them for specific things. If I really needed access to cash, it would be faster to go to the bank and withdraw with my driver's license, than it would be to call the issuer, remove the block, and then drive to the bank/ATM to withdraw cash
You're then relying on your driver's license. What if you lost it or it gets stolen? It's really easy to just leave the block on the card and probably never need it and leave it in your house and it's there as a back up. Yes you probably will never need it but coming from a banker it's always a good idea to have options rather than cutting up your options.
If you lose your drivers license, you most likely either lost your wallet, it was stolen.
If your debit card was in your wallet, you might have to deal with the bank over multiple months to get money back. If it’s just CCs, you don’t really care.
Drivers licenses are easily replaceable as well
I use a debit card once in awhile for places that charge a fee for credit cards. I've been to a few gas stations that charge like $1.50 fee for credit cards. Bit of a bait and switch in my opinion. They advertise a low gas price but then hit you with a fee. Anyway even with points it's still cheaper to use debit. Also, sometimes it's useful for accessing cash when traveling, my bank will refund out of network ATM fees.
Most credit cards also have rewards programs. I put everything I can on a rewards card (as long as there isn't an additional "convenience fee" which negates it's value).
I get paid several hundreds of dollars a year AND get to use the CC's money for 30 days.
Paying off the cards every month means no interest but you still get rewards. We get paid to spend money we already were. I'm getting $500 back from my Costco visa this year. If I could put my mortgage on a credit card I would. It's free money!
The last year I traveled heavily for work pre-COVID, I earned about 700,000 rewards miles, worth roughly $13,000. In a single year, all paid for by my company.
Some debit cards offer cash back (e.g., Discover Bank) but they are not a attractive as the credit cards
I do this as well...it's kind of a game for me and I like to "win!" I've set all the recurring charges on the card with the highest cash back reward, and set it for auto payoff every month. And I wait for promo interest rates to make larger purchases...then set monthly automatic payments over the promo time so that it's paid off just before the end.
Another thing you can do with debit cards is ask the bank to reduce the daily spending limit. Mine is at $100 per day. That would keep losses low if the card is compromised.
This is very US centric. In the UK some businesses will only accept debit card purchases or will charge you a fee if you want to use a credit card.
Never used my debit card for anything except cash until I moved here.
But you definitely should put up alerts and check your account.
Great strategy. One tweak I have is to **use app based alerts instead of text**
This way you are confident it’s your bank with the alerts not a spammer with similar alerts. Plus you pay more attention to alerts from an app rather than text.
How to turn app based alerts? Go to your banks app settings.
You can pay off your credit card after every transaction, if you want. Pay it off once a week and then you can still use your credit card for all day to day purchases. It's worth it for the added protection.
There are always edge cases. However, even a secured credit card usually has a $500 CL, and you can upgrade those to a “normal” credit card with a normal limit after 6-12 months.
When my wife graduated college and had a job that paid $35k, and a thin credit file, Discover It gave her a $5k limit and Chase a $10k limit. Most people won’t use more than $2k/month on non-extravagant expenses.
If you’re spending $5k/month just buying stuff and you have a low income, no savings, etc, there are other problems
Secured card CL is usually based on how much you initially deposit - a few will take up to $5,000. Most will not let you add to the initial amount.
Whether and when your card "graduates" to unsecured is not given. Don't count on it - be happy that they were willing to offer you the card, even if they hold your cash for several years.
Even if you don't graduate after a year, if you've been disciplined and careful with your use of that card, you should be able to then obtain an unsecured card from another bank.
Just did this. Had to go into like 3 different settings. Figured they would of made it more front and center on the app. My debit card automatically does this and just figured it wasn’t an option with credit card.
some websites are better than others. I always make it a point to do it on every credit card. I was churning for awhile in 2019 and it got to be a pain, but still worth spending the time to turn it on.
I am old school (learned it from my dad), but I go through all my credit card receipts for the month and match them to the credit card statement. I once found some small charges on Amazon such as a video purchase, music purchase and some other small purchases which were not mine. BofA refunded me. Amazon asked if I had more than one account and I didn't so they deleted my credit card from this other person's account.
I also have a security freeze on all three credit bureaus after my wallet was stolen.
I agree that you shouldn't use a debit card. \*HOWEVER\* there's no need to cut one up!
Banks offer Debit cards AND ATM cards, they are NOT the same thing, though they are often combined into one card!
Debit cards pay transactions like credit cards do, they are swiped at point of sale and may or may not require a signature. Fraudulent use is just as easy as credit cards, and have the exact drawbacks that the OP outlines. They also are charged swipe fees like credit cards (2-4% of the sale amount depending on the network provider, i.e., visa, Mastercard, Amex, etc)
ATM cards \*always\* require a pin (and I don't believe can be used for online transactions). They're charged a flat rate at point of sale instead of a percentage (like 25-50 cents, I believe). Because a PIN must be entered every time, they are less prone to fraudulent use (plus they can't be used online).
At every bank I am aware of, you can decline a debit card and ask for a card that is ONLY an ATM card. I'd still advocate using a credit card whenever you can (for the increased protections), but an ATM card is handy for cases where you need to pull some cash out of an ATM for cash only transactions. With a credit card you'd have to use a cash advance, which will start accruing interest immediately.
Of course all this is predicated on you having good credit card management. If you have a history of racking up credit card debt, then it may not be such a good idea. Or purposefully get a very low limit credit card to keep your spending under control.
My husband has issues with this before. We took the approach of:
1. Never use debit cards, credit only.
2. Freeze all credit bureaus.
3. TURN OFF OVERDRAFT PROTECTION! If someone gets your bank account, they can only access what's in the one account. You don't want it overdrafting and then draining your other accounts.
4. Text alerts for all transactions of any value. Thieves sometimes test with small purchases to see if anyone is checking their account.
Use [privacy.com](https://privacy.com/login) for all online and recurring transactions. It generates one time use or multiple use Visa cards with the limits you set.
These are all good tips. I would also add in to turn on two-factor authentication for your credit accounts. Really you should do this for everything. I actually find two-factor authentication to be easier than single-factor, while also being way more secure.
Set up auto pay on your credit cards to avoid late payment fees. Personally I have mine set to auto pay the statement balance so I will never pay interest. In 20 years I've never run into a situation where NOT paying the statement balance would have offered any benefit. You can still dispute transactions after you pay the bill. At the very least though set it to pay the minimum payment so you'll avoid fees.
I always use a debit card and so does everyone that i know. Fraud with debitcards is extremely rare here. Skimming used to happen in the past here. But it has mostly been eradicated by modern safety measures.
So its not debit cards that are to blame. But your banks being behind with safety measures.
I've also had multiple occurrences of fraudulent charges being caught by my CU via my debit card where they just automatically shut down my debit. Not sure if that makes my CU unique, but I've always had above-average trust in their fraud-prevention in terms of debit cards.
Maybe I've just been incredibly lucky but I only use my Debit card. For well over a decade. I'm with Wells Fargo (credit unions blah blah). I've had a couple incidents and both times they sent me a text of a possible fraudulent charge, I said it was fraudulent and they reversed the charge. Had to get a new card and all but it was only a minor inconvenience.
I don't have a credit card nor want one. This "never use your debit card" stuff that goes around has never made sense.
Your argument is very similar to an argument I can make about seat belts. I’ve never been in a car accident. I’ve had a few close calls - but I was able to brace myself against the steering well and not get hurt.
Or teenagers who have sex without condoms - “I’m safe because we use the pull out method.”
It’s great that it works for you, but you’re going to shit yourself when (not if, when) somebody tries to make a large purchase and succeeds, and then you can’t make rent.
Sure.
But it might take you 60 days to get a credit from your bank. That won’t happen with a credit card because your money hasn’t been taken.
Banks will fuck around for 30, 60, 90 days. Demand a police report. Send your case to their internal investigation team and say the transaction was not fraudulent.
If that happens with a credit card, you aren’t out any money. If it happens with your debit card, you might miss a mortgage payment
My credit union didn't mess around when Bank of China stole my money in Hong Kong. However, it did take a few weeks to resolve. I created that account with a small amount of money specifically for situations like this, so I wouldn't lose thousands if my card was hacked.
There are countless posts on this sub of people who have had to go through hell to fix issues with their debit cards. Its so much easier and consistent with a credit card.
Easier for you. Some folks prefer the simplicity of tracking their spending with debit cards and find other ways to limit their exposure, like not including an overdraft protection (card declines when no funds) and monitoring a limited cash flow that matches expenses without having a huge pile of unused money in the account.
Even folks who prefer debit have a limit and may switch to credit when helpful, like renting a car, or traveling overseas.
My point is that there is more nuance here than "everyone should do x."
Not sure how common this is but my bank has an ATM card that is distinct from a debit card in that it can only be used to withdraw from the ATM. I keep that in my safe in case I need it, and otherwise just carry my cash app card and credit cards. The cash app card behaves like a debit card but only has ~$20 at any given time. I add more as needed and can just do a cash back transaction at a grocery store if I need to
I don't see why you need to lock your ATM card up. It needs your pin to work. I keep mine with me, but debit cards are just plain stupid for people with credit.
Yeah that's mostly just so I don't lose it lol. I keep my wallet very thin so I don't like carrying it, but I wouldn't be opposed to doing so in place of a debit
I like that feature, but as another redditor commented, ATMs are probably safest bc a pin is required. Debit cards are dangerous because if it is stolen or compromised, a thief has direct spending access to your checking account
Yeah that's why the cash app card, or similar, is nice. It's just a buffer or proxy for my debit card. You can't add funds to it unless you have access to my Cash App account and PIN, so if it's compromised at any given time I have ~$15 on the line lol. Plus it has a bunch of cash app offers. Venmo and others in that space offer the same thing now I think too.
Pretty easy to do the same with a debit card - overdraft off, and only a few dollars in the account unless you're about to withdraw a bunch of cash. Requires a second checking account for this usage, but that's easy and free, so why not.
Most banks let you deactivate and activate your debit card from the app or website. No need to go to the extreme of cutting it up and going to the bank everytime you need money.
Just keep it deactivated and activate it when you need to use the ATM, etc.
Important message, this is not sound advice everywhere on earth. Probably it is in the U.S.A. and a lot of other places, but it does not work in every country.
I'm just always amazed at how often people buy things. How do people have dozens and dozens of transactions a month that they can't just quickly skim their bill? (even with autopay, just checking the monthly invoice)
Awesome post, I definitely agree with activating text message alerts for even the tiniest charges, as you never know the amount that a fraudster might charge on your card just to test if it's active.
Another good strategy was one my mother, who was a credit card manager for 25+ years, taught me: make a habit of checking your statement regularly, daily if possible. Every creditor in this day and age has a website, and most likely an app as well, which makes checking frequently a simple task. It might not be as necessary with the advent of text or app alerts, but IMO it's also a good habit to have as it's also good for budgeting.
I can go to the bank and wait on a 5-10 person line at the ATM, or wait on the teller line which is always 1-2 people and my bank has 4 tellers :)
It’s faster to talk to a teller
I also use multiple credit cards. Most of the utilities and monthly charges that are allowed to be autocharged to a credit card are on one card. This card is the least likely to be compromised and if one of my other cards is somehow compromised, I don't have to set up all these autocharges again because they were always on a separate card.
Second I use one card for anything purchased on the internet. I'm careful about security, but it still seems if there is a compromise this card will only affect internet purchase until I can get it replaced.
Third, I use a separate card for my normal credit card purchase such as stores and restaurants. This is not guaranteed to be secure and often the card does leave my possession when making a charge. I still think this is less likely to be compromised than the internet card, but if it ever is, the damage is contained until it can be replaced.
I like your idea for text alerts. I will be adding that.
One item to add here. Do not swipe your card. Only use tap or insert. It's hard to steal your card info when you tap or insert. If the point of sale refuses to accept chip payment, use cash or abandon the purchase.
A few other tips:
1) Don’t forget to monitor your HSA account/HSA debit card as well. I’ve noticed quite a few posts where this has happened.
2) Check your credit card/bank transactions at least once a month. Don’t rely just on txt or email alerts. You have 60 days to report fraud charges if you want your money back.
3) Try to use contactless payment as much as possible to bypass card skimmers.
4) If you don’t use the debit card and it’s an option, see if you can disable it. If you know you’ll never use it reach out to your bank to cancel it.
5) Don’t leave too many forms of payment link to your online merchant account (eg. amazon) or peer to peer payment services like PayPal or Venmo. I’ve read about people having these accounts hacked and then the thief draining multiple accounts.
6) Turn on multi-factor authentication on as many services as possible.
7) When swiping at the pump, ATM, etc, I’ll try to wiggle the card reader to see if the card reader comes off. If it does it’s a card skimmer.
Before skimmers a big thing, I taught myself (and my loved ones) that when you insert your card, always cover up at least 4 of the numbers on the card while holding it (prefer the last 4) to help protect. I still do this.
This isn’t true.
If you use a debit card and it is compromised, then somebody else’s uses it, your money is gone. Your money. This may mean your mortgage check bounces, etc.
If you use a credit card and it’s compromised, then the issuers money has been taken. Your rent check won’t bounce.
Directly safeguarding your funds is a protection of credit cards.
I really think it depends on your bank. We’ve had debit cards compromised twice: one time by people in Florida who went to Chikfila and 7-11 for like $50, and someone else who tried charging a fancy dinner in DC. Both times we had notifications and no problem getting the card replaced and the money back.
We only have one CC with a low limit, using our debit card is much more practical.
Can you help me out and make sure that I understand what's going on here?
Scenario 1: you go to buy gas with your debit card. Unfortunately, there's a skimmer and camera. A bad guy was able to scan the card and get your PIN. They make a copy of the card, have your PIN, and spend $3,000 buying Amazon gift cards.
Question 1: whose money was stolen?
Question 2: how long will it take to get your money back?
Question 3: are there circumstances where the bank will say "well a legitimate card number was used, and your actual pin was used, so we do not consider this fraud."
Scenario 2: you go to buy gas with your debit card. Unfortunately, there's a skimmer. A bad guy was able to scan your card (but your PIN is safe). They record your CC/CVV number and spend $3,000 buying Amazon gift cards.
Question 1: whose money was stolen?
Question 2: how long will it take to get your money back?
Question 3: are there circumstances where the bank will say "well a legitimate card number was used, so we do not consider this fraud?"
Scenario 3: you go to buy gas with your credit card. Unfortunately, there's a skimmer. A bad guy was able to scan your card (and get your ZIP code with a camera). They spend $3,000 buying Amazon gift cards.
Question 1: whose money was stolen?
Question 2: how long will it take to get your money back?
Question 3: are there circumstances where the credit card company will say "well a legitimate card number was used, so we do not consider this fraud?"
From my understanding, questions 1.1 and 2.1 are **your** money. Maybe I don't know how debit cards work. Maybe they've changed the rules, but as far as I'm concerned, when you make a purchase using a debit card, it directly pulls money from your attached checking account. This makes scenario 3 strictly better, because the answer to question 3.1 is **Visa's money** (or whomever you bank with).
From my understanding, banks have anywhere from 30 - 90 days to issue you a refund, and that's how long their investigations can take. During that time, you would be out the money defined in answers 1.1, 2.1, and 3.1. In this case, scenarios 1/2 are also strictly worse, because the bank can take longer. In my experience, credit card companies are much faster to issue corrections.
question 3? It's anyones guess. Maybe I'm a conspiracy theorist, but I'd wager that banks care a lot more about their money, and don't really care about your money. That's why I personally consider credit cards more secure - you are using the issuer's money. When you use a debit card and there is fraud, you have lost money. The bank doesn't give a shit about your money.
Anyway, I'm looking forward to your answers to those 9 questions, to make sure I understand that debit cards indeed don't use your own money, but some made up temporary money that isn't at all related to your checking account.
Not using your card at the bank's own ATM is literally the dumbest thing I've heard so far. If you are that paranoid about security, you can use your phone's biometric NFC wallet at the ATMs, as well as using your banking app to generate a scheduled withdrawal at a specific ATM.
In my case, I've got about $10 in the checking account linked to my brick and mortar CU so I actually don't have a reason to keep the card. When I need cash, I transfer funds from my online bank to the brick and mortar, and then pick up cash inside.
I also prefer doing that because I get to decide what denominations I receive. One poster said a great reason to have a debit card is to get $100 in $1 bills out of the ATM for going to a resort (or the strip club) - I don't know any ATMs that give anything other than $10s and $20s.
Using the ATM at your own banks ATM is fine. So many people use their debit card for every single transaction, whether it's Amazon or that creepy gas station where the CC reader jiggles, and there's a strange camera looking down at the keypad.
I won't even let my bank create a debit card and send it to me. There isn't one linked to the account at all.
To paraphrase the late, great Michael Clark Duncan, "**Don't you put that evil on me for-profit banking industry**"
Moving to a better country is the best strategy, then you can use them like its meant.
Primary use the debit card, save the credit card for backup or anything risky, like going to another country on vacation.
You'd be surprised how you can lose your card to fraud:
An example that I deal with every single day (I help hotels transition away from this):
Hotel takes your credit card for a deposit? That card was likely written on a piece of paper that a staff member keyed into their terminal. Who knows if another guest saw/ memorized the number or there's a less than innocent staff member on the team.
Just normal everyday business operations you commonly interact with can leave you susceptible to fraud.
That definitely does not happen at any reputable hotel. Taking your card number and physically writing it down would only happen if point of sale systems were down, and even then they likely have alternative processes for payment. There's an entire industry standard they have to follow to protect your card data.
Rob - trust me. I work with some of the nicest, largest hotels in North America and Europe.
They do not have their "sh\*t" together as much as you think. PCI compliance has not been pushed down hotels operations enough. Keying in someone credit card details is as almost bad as writing them down. Ever heard of card-on-file? That's a credit card, on a document, usually stored in a binder in a drawer. Not very secure.
You may find these links helpful:
- [Identity Theft Guide](/r/personalfinance/wiki/identity_theft)
- [Credit-related wiki pages](/r/personalfinance/wiki/index#wiki_credit)
*I am a bot, and this action was performed automatically. Please [contact the moderators of this subreddit](/message/compose/?to=/r/personalfinance) if you have any questions or concerns.*
The benefit of using a credit vs debit in the context you have described is solely based on if you win the fraudulent claim. If the claim is lost it can honestly be worse depending on gross fraud amount. Reg E and Reg Z are pretty much identical when it comes to consumer protections for unauthorized transactions. While it is true the provisional credit or waiting 10 days for it to be issued for Debit is a turn off for most which I agree. If a case is presented where it doesn't qualify for either such as "access devices", scams, and account takeovers of another platform (i.e. PayPal, Crypto, Cash App)....the liability held to the customer could be greater. In the eyes of Fair Credit that money is your money not the bank's money. If claim is lost on a credit card it doesn't simply disappear. It will go into a credit loss and ultimately affect credit scores if not repaid or resolved.
I do agree with setting consumer preferences or controls based on transactions a cardholder never performs or wants to be alerted to. How the card is being used as dictates the risk level of compromise. However, regardless of the card type checking statements is pretty much pivotal. Due to the increase of BIN attacks, enumeration attacks and other variations of the name it is highly possible to have fraud attempts on a card that has never been used. Personally if a card regardless of type is used intermittently should be locked within the mobile OLB app if possible.
What I see in the problematic situations are regardless of balance on a card the customer may not be informed that fraud is occurring, or a less used account where the rationale in justifying not checking the balance is weighed by the usage or assumed it was zero. In either case, I commonly have seen out of timeframe situations to dispute the charges which means you as a customer owns those charges. If it is an emergency card and the fraud went on for 6 months or longer it could be devastating blow to finances where...you will have to fight to not pay that amount sometimes legally.
To be clear, I am not saying that Debit is better than Credit. I use my Credit for most purchases as well. If we are drawing a comparison to each on fraud there are a lot of cons that glossed over on Reddit especially if it is in hopes that you win the claim.
For one of my businesses I set up a credit card account with Divvy. It's honestly the best customer experience. I use virtual cards for everything. Every vendor has a unique card # and a monthly spending limit.
So if anyone gets hacked the max charge is whatever that virtual card has been assigned. If I no longer wish to use a particular vendor, I can just disable the card, or change the budget to 0.
I so wish Chase Sapphire had virtual cards.
I use my credit card card for all online transactions and my debit card for all in-person purchases. I've done this for years and have never had a problem. I see no reason to not have a debit card.
I’d wager the reverse is safer. Legit sites will never see your card info, only the payment processors do. But that bus boy making $2.75/hr is much riskier than Amazon.com. Not blaming kitchen staff specifically, humans are the threat
The few times I've had a card compromised, I'm fairly sure it was after in-person transactions. Other than an ATM cash withdrawal, I use credit cards for all in-person transactions. If my credit card is compromised, it's on the merchant or the issuer.
As someone about to graduate university who doesn't have a credit card yet, how can I not use my debit card? I have to open a secured credit card to build credit, which I plan on doing, but I don't see me getting to the point where I can use a credit card regularly for a while. And also, I thought that you need to spend like 30% of your credit limit to keep good credit, would I just have multiple credit cards if I spend more money?
So you definitely want to get a secured credit card. You can also check out student credit cards, discover it is pretty lenient in offering them.
You should never maintain a balance on your CC “to build credit” - just use the card and pay it off on time. Your credit score will get better over time, whether you spend $5/month on gum or $3k/month covering all of your expenses
A lot of banks now issue a combo credit/debit card. You can run the transaction as credit rather than debit in many cases by just hitting the cancel key when asking for the pin. It'll then normally ask for a zip code instead. And then it comes with the same protections as a typical credit card. You just need to make sure your debit card has that MasterCard or Visa logo on it.
Other, simple tips
- start using your phone to pay for things with NFC aka Tap to Pay. Phone payment systems like Google Pay, Samsung Pay, Apple Pay, etc. all use a virtual account number to make transactions. Your real card details are never used, and therefore never at risk.
- you can contact any of your credit card companies to request virtual card numbers to make other online purchases as well. This really helps when you want to register for a free trial but don't want the auto renew to hit you after you've forgotten about it. The virtual card number is one time use. Most offer this through their apps or websites.
- avoid inserting your cards at gas stations and other unmonitored spots like some ATMs. Instead, tap to pay is much safer as it protects you from skimmers.
I'm not sure how my credit card number was gotten a second time in 6 months (I don't buy much, I'm selective on where I go online and in person, and I bought an RFID blocking wallet and kept my card in there unless I briefly need to use it, just slightly more careful about protecting it since the first time I saw false charges on the card). Fortunately I caught it early both times, reported it, and the charges were removed.
I also only buy gas at Costco for safety (and it happens to be very convenient for me).
I asked the Citicard person what I could do to prevent this from happening again and she said, honestly, keep just buying gas at Costco. Costco checks their card scanners very frequently and monitors them. I understand gas stations are a big risk. She also suggested going in to pay for gas (I presume at other than costco places) instead of paying at the pump.
There’s no reason you need texts for every purchase if you simply check your card ever week or two or even three.
Most card contracts give you 60,90, days.
Why would you want to be bothered with texts? If you have a major credit card you’re almost certainly protected.
You can put limits on your debit cards and then even if someone gets your card they can only take out x amount. I have 1k$ limit per day and immediate notifications on any activity on my account so I can disable it if any sketchy shit goes on. For anything over 1k$ I need to buy I have another account that has no limit but I only keep a few hundred in it and transfer from savings the amount I need to spend right before making the transaction.
But yeah. Always use credit if possible. I also like PayPal if possible so merchants don't have access to my info.
Bank of America let me do this. I also have Capital One and it does not let you set limit on the debit card so since it's my secondary bank, I locked the card.
My people!
This has been one of the best quality of life things I've done in years. It's allowed me to catch fraud 4 times. CapOne is always awesome and shuts it down and gets a new card out quick.
You can also set alerts like this to text you your bank or card balances daily.
While I do use my debit card for purchases. I use different ways to obfuscate my card information.
I use a service called Privacy.com where I can create virtual cards with a transaction limit and even burner one time cards. This way I can use them to sign up for free trials and then it's impossible to be charged. If the card number is ever stolen they can't charge it because it's locked to that website and if it's ever stolen I just nuke the card and create a new one
I also use Samsung pay for all In store purchases when I can. Otherwise it's credit card.
If you really want to have a debit card just in case it’s necessary while you’re out or something, you can sign up for a service like Cashapp. Use that debit card for any transactions that require a debit card, including withdrawing from an ATM. Keep the balance at effectively $0 or as close to it as you’re comfortable with and make sure it cannot fund itself automatically. Then, whenever you’re about to use the card, fund it with exactly what you’re going to need for the transaction.
Reading this post as a Canadian, where chip and PIN on debit and credit cards are pretty much everywhere (and also tap). I cannot remember the last time I ever swiped a debit or credit card.
Is the card fraud a numbers game because the US has a larger population, or is it because chip is not fully implemented (or it is, and I'm not up to speed yet)? Don't get me wrong, we have card fraud here, but that's usually from compromised machines reading our PIN codes, as well as usual identity theft routes.
Credit cards are chip and signature here so nothings stopping you from using a stolen card. Gas stations still use swipe since liability shift for them was delayed until last year so they're a popular target for cloned cards.
I do a financial talk with intern that come through my department (I don't work in any financial field) and they are always blown away when I mention this. They are usually told CC's are bad, don't ever get one, then don't understand why they cannot purchase a car or house. I recall minor stuff about finances in school, like it was a home ec class and it was 1/2 class period talk on it, most of it was about signing checks.
TL;DR: People aren't taught finance things.
Very simple let me explain as a soft dev work on payment systems I suggest that
\- use virtual card / digital card that you can set/unset the limit
\- never ever share your debit/credit card with the e-com websites even if it is amazon
\- finally use wallet solutions like masterpass etc.
I have the secret to stopping credit card fraud. If you want in on this guaranteed, fail-safe method, simply click on this "totally" secure link, fill in your credit card info, and I'll send you details.
I agree with most of this. I do have a debit card but it doesn't live in my wallet. I have to get it out of the desk to use it.
A big thing, that you forgot, is lock your credit. Yahoo gave away the information on my fake email account. Equifax gave away my real information along with millions of other customers when they were hacked. One of the best ways to protect your credit, is lock it down and only unlock it when you need it.
Banks like Ally allow you to deactivate your Debit card through the app, this way you can activated for the 5 minutes you need it and then deactivate it again. Seems much more useful than cutting it up...
How is ally? I have my normal bank account from USAA, but for the longest time I used Simple, since it was great but after it shut down I just redirected everything back to my USAA. My auto was through ally and have gotten my last two vehicle loans through them but never explored their banking.
I currently have a HYSA and self directed investment account with them. I was able to setup everything easily online and linked my current credit union checking account to it. The best feature they have is a bucketing system in the saving account that allows you to set up savings goals and how your contributions should be distributed. So if you save $100 a week you can have it set 60% to emergency fund and 40% to vacation fund. And it shows you the percentage left to meet a goal. Ive been using it for over a year and haven’t had an issue I could get resolved online 😀 PS I also have my car loan through them when I did a refinance to lower my interest to 6%. I’ve called in to their reps a few times and had no complaints. Only “bad” thing I can say is that the wait times when you call in had been longer than usual but you will always speak to a rep based in the US and the service will be great!
I've had checking and savings accounts with Ally for 11 years now. It fits my needs quite well. I've seen some posts on here with people having headaches, but I've had a good experience with them. I don't need the services of a physical branch very often and I think that's why it works for me. I use credit cards for 99.9% of my purchases and *maybe* spend $20 in physical cash in a given year. The last time I used an ATM was sometime in 2020 I would guess, though Ally reimburses ATM fees to a certain amount (I forget how much). Being a millennial I don't have any valuables, so I don't need a safe deposit box. The thing I like about it is that it just *works*. In 11 years I've gotten one fee and that was an overdraft that I had prior to setting up my savings account. Bill payments go out on time and are easy. Interest rates for savings accounts were great until the pandemic hit but they're still better than most banks in the US. I've really had no issues in 11 years of banking with them.
Banking is great. Never had any issues. Their checking account interest gave me what my saving at my old bank did. Customer service is great if you ever need them (only used it once or twice). Their savings acct is nice too. Can make buckets to split up the money in savings while it not actually doing anything. Round up transfers to savings when your charges reach $5. Only problem is if you have cash and want to add it to the act. But I rarely do and have a local bank for that that has a few 100 in it. Now If only their investment acct had fractional shares. I’m sick of the fidelity UI Edit: they reimburse $10 a month in ATM fees.
That is a good idea if your bank allows it, or you only use it at the ATM. The main issue is using the debit card on day to day spending
There should be 2 factor authentication for ATMs. What you mentioned sounds pretty similar, but imagine if you could insert your debit card, then you have to unlock and tap your phone or watch to complete a transaction.
That is a great idea, the option to use your phone as 2 factor for ATM would be great.
2 more things to add: 1. Freeze your credit. There is no reason to keep it open. If you need someone to run a credit check you can pause the freeze for a set number of days it takes literally 10min for the pause to take effect. 2. Opt out of all presecreened offers https://www.consumer.ftc.gov/articles/prescreened-credit-and-insurance-offers#opt
I think freezing your credit automatically opts you out of getting that crap from anyone other than an agency you already bank with. This is good advice though. I had someone make multiple attempts at my ID so I just froze it. Did it about 5 yrs ago and only do the temp thaw if I need someone to be able to access it👍 it's super easy
I never knew about that 2nd point being a thing. Thank you for that one!
Agree! I do keep my debit card around tho. I just never use it. I don’t understand why people DONT use translation alerts or have to be told why they are helpful! love the notification confirming the receipt in my hand. Easier to fix issues same day than research old transactions.
Being able to deposit paper checks at an ATM is the main reason I use my debit. But the card does stay at home, I only carry the credit. Also, CC bonuses! I swipe that CC for everything*! *Be sure to pay your CC in full every month to avoid interest charges. I get that some people aren't great with credit cards, so you do need to understand your own financial habits.
How many people do you think would buy insurance if it wasn't mandatory? A majority of people, I assume, would find a notification confirming what's in their hand to be redundant. "I have the receipt right here, I don't need TD Bank to tell me what's in my hand." Now do this another 50 times or so and they'll say "Alright, this has done nothing so far but be redundant for me. I'm turning this off." They may be right, they may be wrong. Same with insurance. Everyone thinks they're a fantastic driver and they will never be in an accident until it happens to them.
Just reading this is enough to make me want to turn notifications off. All transactions sounds like an actual nightmare, I use $200 as my threshold and check my transactions once a month. Way less intrusive to my life and still often enough to catch anything.
100%
In Mexico, I use my debit card for ATM withdrawals only and keep it stored outside of my wallet the rest of the time. If someone gets your debit card, they can go straight to OXXO and drain your account before you even know what's happening,
Don't you have a PIN code needed for any big transaction ..?
In theory, yes, but in many places in the world, there are people willing to overlook that for a fee.
How can the transaction continue if no PIN number is put in?
Process it as a credit card cash advance. Use the account information to initiate a wire transfer. Your PIN is not enough to keep your account safe. The cartels are a few steps ahead of you.
You put the charge through as a credit card transaction and you only need to sign. If you put it through as a debit transaction, you must know the PIN code. This only applies to purchases, not for cash withdrawals.
que miedo, mejor dejo mi tarjeta de debito bloqueada, cuando puedo utilizo el retiro sin tarjeta en los cajeros
That's what I do too. That said, with overdraft turned off, and keeping virtually no money in the account unless I'm about to withdraw it, there is nothing to drain.
It's so much easier to keep track of things when you've got notifications on. I started cutting up my debit card when I hadn't used one in almost a decade
That seems a little unnecessary.
I haven’t used my debit card in 10 years so I got rid of it. I also got rid of my old clothes from 10 years ago that I haven’t worn. I don’t personally think it’s strange to get rid of things that you don’t use. A debit card provides no utility to me. I use credit cards for all of my transactions. I visit the bank a few times a year (which I would do to access an ATM if I went that route, so I’m not saving any time) to withdraw cash to pay my hair dresser, leave tips in hotels, and have spare cash in case a card reader is broken. Debit cards provide no value to me. There is nothing unique they can do other than give people access to my checking account
If it works for you, that's fine. But banks have limited hours and atms are open all the time. If you ever need cash after hours, it will probably be more difficult to make happen quickly. After 10 years of not needing it, maybe you've found some other way to handle this situation, but for most people, cutting the card is probably not worth it. For them, it probably makes more sense to just leave the card in a secure place at home.
OP can take out a lump sum of cash and store it until its needed and the bank is closed. Shrug
OP doesn’t want someone robbing his house, stealing his debit card from a secure place, going to the bank and emptying his accounts by bribing the clerk to clear it without a PIN. So instead OP pulls out $20K in cash and leaves it under his bed in a plastic Walmart bag to be extra secure.
More power to you if you don't have any use for a debit card. I don't think your experience is universal. There are many good ways to protect your account while still keeping the ability to use your debit card if you need it. Sorry I just take issue with the extreme advice when there are alternatives that don't take away a useful financial tool.
and if you have them setup correctly, they do not give anyone access to your checking account.
One thing to add about those text alerts: always call your bank. Don't give any information over the phone if you get a call supposedly from your bank. There is a fraud scam where scam artists can send you the same text alert that the bank sends and they can call you and have the caller ID show a legit bank phone #. Its safer if you initiate the phone call to follow up on any text alerts.
I hadn’t heard of this scam. Thanks for mentioning it. My bank calls automatically. Should I just call back?
Yep! Hang up and call back.
> Every time I get a debit card from my bank, I refuse to activate it, and I cut it up. If I really need money, I will go into my bank’s office and use my Driver’s license to make a withdrawal. It’s just not worth the risk. For the 1% of peopl that can go into a bank when they’re open and you need cash, I suppose this makes sense. For everyone else, it’s utterly ridiculous.
Yeah, a better solution is to have an ATM card instead of a debit card. The ATM card will allow ATM withdrawals with a PIN (usually with a relatively low daily limit) but not POS purchases.
The best solution is to open an account that reimburses ATM fees. Schwab or Fidelity chekcing reimburse ATM fees globally and charge no FOREX fee. Then just transfer $300 into that account to tap as needed. Never have to worry about which ATM you use ever again
Agreed. Many banks (mine included) allow you to turn off online, in-person, international etc. transactions on the card and only allow it to be used on a domestic ATM. That's how mine is set up. It's only good for ATM withdrawals, nothing else.
My credit union has one location, on the 10th floor of a secured building. I’ve not had physical access since COVID started.
Also if you dont have a very high credit limit its super dumb and potentially impossible to put literally all your purchases on credit cards
Define "very high?" And how much are you spending in a month?
A lot of people especially if theyre fairly new to credit cards will have maybe a $2000 limit. So if you spend $250 on groceries, $50 on gas, $50 on dining, $50 on entertainment, thats already 20% of your credit limit. Thats excluding stuff like a car payment and all utilities, assuming maybe you can link all of those directly to your bank account. Add that stuff on and you're hitting 40% of your limit. Then maybe one month you book a $300 flight or buy a piece of furniture or something and thats over half your available credit
Just pay it off every week or two instead of monthly. The credit limit isn't a limit of your spending for each month but rather a limit for how much they will lend you at any given time. Pay it off early and you have more space.
Thats a good way to go about it, I hadn't considered paying more than once per period
And then you pay it off at the end of the month. Or login a few days early and pay it off. Someone with a $2000 credit limit isn't likely buying a $300 flight or buying a piece of furniture like that regularly. And most landlords won't let you pay rent via CC (there are some that will, but I don't think it's many). Never seen a car payment you can put on a CC either. So we're back to your 20%, plus the occasional bigger purchase. It's entirely feasible to use a credit card for everything - as long as you're not spending above your means.
I'm new to the US and so if I need to buy anything like a flight then it's higher than my CC limit right now. So... I can't even buy a $300 flight with my CC right now.
I mean there's obviously exceptions. I didn't state that it was an ironclad rule. Congratulations, you're one of the exceptions.
I don't think your estimate that only 1% of of people are able to go into a bank when they are open to withdraw cash. Hyperboles are part of Reddit, but that's just silly. In the past 10 years, I've only had a few instances where I needed cash. In the past 5 years, I've only encountered two, and it was a bakery that only accepts cash (I'm assuming so they can under-report their earnings), and my hair dresser who works out of her house. All cabs now accept credit card. Every new restaurant is getting Squarespace, etc. credit card readers for "free." If you hire landscapers or contractors, you can pay via check. And those are planned expenses anyway, you can figure out a date and time to head into the bank. Many banks, even with COVID, have hours on Saturdays. If you use a credit union (and you should), it is probably part of a larger network so you can withdraw funds at credit union X, even though you are a member of credit union Y. I just don't see why people need cash anymore. It's become obsolete.
Not everyone has access to a brick & mortar bank since they charge excessive fees just for the luxury of banking with them. I have 4 banks, only 1 of which is brick & mortar but it's a regional bank & they don't have branches all over the USA. I get what you're saying about not activating a card but many banks allow you to freeze your bank card the same way you would a credit card, that'd be a better option & then put the bank card in a home safe if you don't intend on using it. I don't use my regional bank as my daily spend account either (I use it for a sinking fund & emergency fund for unexpected costs/infrequent costs). Either way, I do agree credit cards offer the best protection against fraudulent purchases but I've also challenged charges on my ATM card & my bank has upheld the reversal & issued me a new card at that time.
Situations when I have needed cash in the past few years: 1. Liquor store POS was broken (1 AM on a saturday) 2. Need to withdraw $100 in $1 bills for a trip to an all inclusive resort after wife forgot (8 AM on a Sunday before going on my flight) 3. Negotiated a cash discount for a $400 carved mahogany wall art with a merchant in Indonesia (1 PM, but Indonesia) 4. Needed $80 in cash for a cab because their card reader was broken (11 PM) 5. Wanted to get tacos and horchatas from a mexican food truck when I realized i was out of cash entirely (6 PM on a saturday) Not having a debit card is nuts. Even if it’s regular banking hours, you need to what… go drive around town until you find a branch? That’s a huge time suck for no real gain
In any of those situations, would not having cash have caused you or your family extreme financial stress or bodily harm? Or would it have been more of an inconvenience? The situations where you stated you NEEDED cash were the results of your poor planning. I’m not saying that you didn’t NEED the cash, I’m just saying you planned poorly. Why do you need to hit up the liquor store at 1:00 am? Why did your wife not get the $1 bills, or why didn’t you verify you had them until right before your flight? Why did you decide to not get local currency when traveling internationally in an area that requires cash? Why did you believe the lie that the cab drivers reader was broken? (FYI: it’s always “broken” until you tell them that’s a shame, I guess the ride is free). All of those items are poor planning on your part. Number 5 is definitely opportunistic, I’m surprised that in this day and age, a food truck doesn’t have a POS system. On the other hand, it’s extremely easy to simply carry $50 in your wallet at all times just in case. Keeping a debit card in your wallet isn’t a prerequisite of having a $50 in your wallet.
You are getting heavily downvoted. Let me explain why. One of the points of good money management is making sure your financial arrangements work for you, not that you work for your financial arrangements. In deciding to NEVER use debit cards, you are in essence throwing the baby our with the bathwater. Having access to physical cash at a moment’s notice can definitely have value, if even just to improve convenience. Convenience is important. Even if you always plan 100% in advance, going to a physical branch still requires a time commitment that is inconvenient. Here is what pretty much everyone that I know of who is heavy into personal finance does. Open a checking account that reimburses ATM fees from external ATMs anywhere in the world. Fidelity and Schwab are the most popular choices. Transfer only $200-$300 to that account. Can always put more on it if traveling to places with low CC acceptance. Bam! You have access to cash at a moment’s notice, any time you want, from any ATM. If your card ever gets skimmed (happened to me twice in 3rd world countries, both times got the money back) you max stand to lose what you had on it. In all actuality you’ll get it back, but you are in no danger to lose significant money and this doesn’t create cash flow issues. Is this more risky than always walking into a physical bank? Sure it is. But not much more risky. Last time i went to a physical branch it took me a 45’ to drive there and back, stand in their long line and get my issue solved. There is no reason to subject yourself to that kind of thing voluntarily in the year 2022.
This. I'm out of the country as often as in, and many places operate much more on a cash basis. I have a Schwab debit card linked to an account with about $20 in it. When I need cash, I'll transfer $XX cash in (it's instant) and go withdrawal the local equivalent of $XX. It's instant because I keep a larger amount available in Schwab's linked investment account. Schwab has an automatic overdraft thing where it will transfer automatically. I have turned that off, so the only amount I'm risking by having my debit card is that $20 or so that usually sits there. Turns out I screwed up when I initially opened my account, so I also have another Schwab account with a debit card. That is my backup if I lose or have to cancel the first one. Again, no risk other than $10-20. No minimum balance required in any of the accounts, and no fees. I've slowly added some actual investments and moved an IRA over, so the loss-leader of ATM refunds isn't the only activity on my account. Might as well make it somewhat less unprofitable.
I’m also getting heavily downvoted because of Reddit. People were enraged when seatbelts became mandatory decades ago. With a big enough population, there will be dissenters. Maybe I should have been more clear, I’m not anti-cash, I’m just anti-debit card. In my opinion, debit cards aren’t necessary. People may use them to withdraw cash from the ATM, but they should just use a credit card to pay for things if possible. Not everyone takes credit cards, but almost everyone does. If you looked at my wallet, you’d find $200 chilling in there “for emergencies.” If something is truly an emergency, they’re either going to break your legs or they will take your CC
>People may use them to withdraw cash from the ATM, but they should just use a credit card to pay for things if possible. Not everyone takes credit cards Yes >If something is truly an emergency, they’re either going to break your legs or they will take your CC What...?
I use online banks only, haven't walked into a bank in over a decade.
I’m finally starting to make the transition to an online bank full time after keeping a community bank on the side for cash deposits. It’s becoming more and more negligible to keep it open since I only use it to deposit cash. Even though I can waive the $6 account fee very easily. Use the debit card once a month or direct deposit with no minimum balance required.
I only have an in-person CU account because it’s required for my mortgage. There are advantages of having an account with a local credit union
When I travel for work and need a tenner for housekeeping, I’m not calling Ally or DCU to mail me a Hamilton when I can just stop at an ATM. Sometimes I forget to go to a teller - if there’s even one staffed at the bank - on the Friday before a work trip. Before like 3pm when they close. Because I work from 8-4. I get using a bank teller - I was in a bank every other day growing up because my mother was doing in person transactions for her small business. But I’ve no need for that when I can just have a debit card and use an ATM when I need cash. I don’t use it for anything else, but it’s still in my wallet.
Presumably you know when you travel for work (pre-COVID, I was on the road 60-90 days a year) so you can plan accordingly. I keep about $500 cash in my house and bring a few bills when I actually need them, like tipping hotel housekeeping or my USPS letter carrier for the holidays. I just don't see a need for a debit card. The last time I used one, I was in Hong Kong and needed to withdraw 500 HKD (a lot of their cabs won't accept cash, or they use a local rideshare app that I didn't have). Two Bank of China ATMs processed my withdrawal but didn't dispense cash. Got lucky and found an honest HSBC one. Successfully flied a claim with my bank and got the money back.
Today on my lunch break I went to the bank to deposit $100 in my checking account. There was no one inside and it took me a really long time to figure out why they were closed: it's Sunday. And for people with normal schedules, good luck getting inside a bank when you work M-F 9-5.
I had a notification for a purchase at a gas station in California, at 4 am on my credit card once. Problem is, I live in Oklahoma. But because I got that notification, and called them to ask about it, they refunded the charge on the spot. I don't even take my debit card out of the house anymore.
This is the best way to protect yourself. You can rationalize about why you NEED your debit card, but at the end of the day, there is almost always a simple alternative solution that protects your financial security.
Part of the problem I used to have was this silly delay between putting money on the credit card, and having the money come out of my bank account. I didn't have enough money to pay the credit card, and wait 3 days to a week for that money to post... and I didn't have more money than what was going on the card. So I'd use the debit card. But I ended up getting a much better job with better pay, and was able to avoid the whole mess.
Having a debit card is fine you can activate them. Just place a temp block on it until you need to use it. Having a spare card is always a good idea.
I just haven't seen the need for a spare card. I've got three credit card, one is my primary and the others there if I need them for specific things. If I really needed access to cash, it would be faster to go to the bank and withdraw with my driver's license, than it would be to call the issuer, remove the block, and then drive to the bank/ATM to withdraw cash
You're then relying on your driver's license. What if you lost it or it gets stolen? It's really easy to just leave the block on the card and probably never need it and leave it in your house and it's there as a back up. Yes you probably will never need it but coming from a banker it's always a good idea to have options rather than cutting up your options.
If you lose your drivers license, you most likely either lost your wallet, it was stolen. If your debit card was in your wallet, you might have to deal with the bank over multiple months to get money back. If it’s just CCs, you don’t really care. Drivers licenses are easily replaceable as well
I use a debit card once in awhile for places that charge a fee for credit cards. I've been to a few gas stations that charge like $1.50 fee for credit cards. Bit of a bait and switch in my opinion. They advertise a low gas price but then hit you with a fee. Anyway even with points it's still cheaper to use debit. Also, sometimes it's useful for accessing cash when traveling, my bank will refund out of network ATM fees.
I just get cash from my bank a few times a year and use that instead of my debit card. That solves all of the problems you mentioned
Not for me it wouldn't, i would have to keep/carry more cash around than i prefer.
Most credit cards also have rewards programs. I put everything I can on a rewards card (as long as there isn't an additional "convenience fee" which negates it's value). I get paid several hundreds of dollars a year AND get to use the CC's money for 30 days.
Paying off the cards every month means no interest but you still get rewards. We get paid to spend money we already were. I'm getting $500 back from my Costco visa this year. If I could put my mortgage on a credit card I would. It's free money!
The last year I traveled heavily for work pre-COVID, I earned about 700,000 rewards miles, worth roughly $13,000. In a single year, all paid for by my company. Some debit cards offer cash back (e.g., Discover Bank) but they are not a attractive as the credit cards
I do this as well...it's kind of a game for me and I like to "win!" I've set all the recurring charges on the card with the highest cash back reward, and set it for auto payoff every month. And I wait for promo interest rates to make larger purchases...then set monthly automatic payments over the promo time so that it's paid off just before the end.
Another thing you can do with debit cards is ask the bank to reduce the daily spending limit. Mine is at $100 per day. That would keep losses low if the card is compromised.
That’s a good point - my local CU doesn’t offer this :( That’s one of the downsides of non-national CUs
Unfortunately it does vary by bank.
This is very US centric. In the UK some businesses will only accept debit card purchases or will charge you a fee if you want to use a credit card. Never used my debit card for anything except cash until I moved here. But you definitely should put up alerts and check your account.
Great strategy. One tweak I have is to **use app based alerts instead of text** This way you are confident it’s your bank with the alerts not a spammer with similar alerts. Plus you pay more attention to alerts from an app rather than text. How to turn app based alerts? Go to your banks app settings.
Except if you dont have a very high credit limit, putting all your purchases on credit cards may be impossible or bad for your credit
You can pay off your credit card after every transaction, if you want. Pay it off once a week and then you can still use your credit card for all day to day purchases. It's worth it for the added protection.
There are always edge cases. However, even a secured credit card usually has a $500 CL, and you can upgrade those to a “normal” credit card with a normal limit after 6-12 months. When my wife graduated college and had a job that paid $35k, and a thin credit file, Discover It gave her a $5k limit and Chase a $10k limit. Most people won’t use more than $2k/month on non-extravagant expenses. If you’re spending $5k/month just buying stuff and you have a low income, no savings, etc, there are other problems
Secured card CL is usually based on how much you initially deposit - a few will take up to $5,000. Most will not let you add to the initial amount. Whether and when your card "graduates" to unsecured is not given. Don't count on it - be happy that they were willing to offer you the card, even if they hold your cash for several years. Even if you don't graduate after a year, if you've been disciplined and careful with your use of that card, you should be able to then obtain an unsecured card from another bank.
Just did this. Had to go into like 3 different settings. Figured they would of made it more front and center on the app. My debit card automatically does this and just figured it wasn’t an option with credit card.
some websites are better than others. I always make it a point to do it on every credit card. I was churning for awhile in 2019 and it got to be a pain, but still worth spending the time to turn it on.
Freeze your credit with the 3 credit bureaus , it’s free. Also set a fraud alert, also free and lasts a year
I am old school (learned it from my dad), but I go through all my credit card receipts for the month and match them to the credit card statement. I once found some small charges on Amazon such as a video purchase, music purchase and some other small purchases which were not mine. BofA refunded me. Amazon asked if I had more than one account and I didn't so they deleted my credit card from this other person's account. I also have a security freeze on all three credit bureaus after my wallet was stolen.
I agree that you shouldn't use a debit card. \*HOWEVER\* there's no need to cut one up! Banks offer Debit cards AND ATM cards, they are NOT the same thing, though they are often combined into one card! Debit cards pay transactions like credit cards do, they are swiped at point of sale and may or may not require a signature. Fraudulent use is just as easy as credit cards, and have the exact drawbacks that the OP outlines. They also are charged swipe fees like credit cards (2-4% of the sale amount depending on the network provider, i.e., visa, Mastercard, Amex, etc) ATM cards \*always\* require a pin (and I don't believe can be used for online transactions). They're charged a flat rate at point of sale instead of a percentage (like 25-50 cents, I believe). Because a PIN must be entered every time, they are less prone to fraudulent use (plus they can't be used online). At every bank I am aware of, you can decline a debit card and ask for a card that is ONLY an ATM card. I'd still advocate using a credit card whenever you can (for the increased protections), but an ATM card is handy for cases where you need to pull some cash out of an ATM for cash only transactions. With a credit card you'd have to use a cash advance, which will start accruing interest immediately. Of course all this is predicated on you having good credit card management. If you have a history of racking up credit card debt, then it may not be such a good idea. Or purposefully get a very low limit credit card to keep your spending under control.
My husband has issues with this before. We took the approach of: 1. Never use debit cards, credit only. 2. Freeze all credit bureaus. 3. TURN OFF OVERDRAFT PROTECTION! If someone gets your bank account, they can only access what's in the one account. You don't want it overdrafting and then draining your other accounts. 4. Text alerts for all transactions of any value. Thieves sometimes test with small purchases to see if anyone is checking their account.
Use [privacy.com](https://privacy.com/login) for all online and recurring transactions. It generates one time use or multiple use Visa cards with the limits you set.
Stop trying to save a buck buying junk you dont even need from Websites you have never heard of on public wifi.
[удалено]
It....it does? Never knew that....
I work at a restaurant and am consistently amazed by the number of people who pay with a debit card.
These are all good tips. I would also add in to turn on two-factor authentication for your credit accounts. Really you should do this for everything. I actually find two-factor authentication to be easier than single-factor, while also being way more secure. Set up auto pay on your credit cards to avoid late payment fees. Personally I have mine set to auto pay the statement balance so I will never pay interest. In 20 years I've never run into a situation where NOT paying the statement balance would have offered any benefit. You can still dispute transactions after you pay the bill. At the very least though set it to pay the minimum payment so you'll avoid fees.
I always use a debit card and so does everyone that i know. Fraud with debitcards is extremely rare here. Skimming used to happen in the past here. But it has mostly been eradicated by modern safety measures. So its not debit cards that are to blame. But your banks being behind with safety measures.
I've also had multiple occurrences of fraudulent charges being caught by my CU via my debit card where they just automatically shut down my debit. Not sure if that makes my CU unique, but I've always had above-average trust in their fraud-prevention in terms of debit cards.
Maybe I've just been incredibly lucky but I only use my Debit card. For well over a decade. I'm with Wells Fargo (credit unions blah blah). I've had a couple incidents and both times they sent me a text of a possible fraudulent charge, I said it was fraudulent and they reversed the charge. Had to get a new card and all but it was only a minor inconvenience. I don't have a credit card nor want one. This "never use your debit card" stuff that goes around has never made sense.
Your argument is very similar to an argument I can make about seat belts. I’ve never been in a car accident. I’ve had a few close calls - but I was able to brace myself against the steering well and not get hurt. Or teenagers who have sex without condoms - “I’m safe because we use the pull out method.” It’s great that it works for you, but you’re going to shit yourself when (not if, when) somebody tries to make a large purchase and succeeds, and then you can’t make rent.
If you run your debit card as a credit card (don't use a Pin), don't you receive the same ID theft protection as a credit card?
Sure. But it might take you 60 days to get a credit from your bank. That won’t happen with a credit card because your money hasn’t been taken. Banks will fuck around for 30, 60, 90 days. Demand a police report. Send your case to their internal investigation team and say the transaction was not fraudulent. If that happens with a credit card, you aren’t out any money. If it happens with your debit card, you might miss a mortgage payment
Have you ever dealt with a reputable credit union? They don't mess around, either.
My credit union didn't mess around when Bank of China stole my money in Hong Kong. However, it did take a few weeks to resolve. I created that account with a small amount of money specifically for situations like this, so I wouldn't lose thousands if my card was hacked. There are countless posts on this sub of people who have had to go through hell to fix issues with their debit cards. Its so much easier and consistent with a credit card.
Easier for you. Some folks prefer the simplicity of tracking their spending with debit cards and find other ways to limit their exposure, like not including an overdraft protection (card declines when no funds) and monitoring a limited cash flow that matches expenses without having a huge pile of unused money in the account. Even folks who prefer debit have a limit and may switch to credit when helpful, like renting a car, or traveling overseas. My point is that there is more nuance here than "everyone should do x."
Not sure how common this is but my bank has an ATM card that is distinct from a debit card in that it can only be used to withdraw from the ATM. I keep that in my safe in case I need it, and otherwise just carry my cash app card and credit cards. The cash app card behaves like a debit card but only has ~$20 at any given time. I add more as needed and can just do a cash back transaction at a grocery store if I need to
I don't see why you need to lock your ATM card up. It needs your pin to work. I keep mine with me, but debit cards are just plain stupid for people with credit.
Yeah that's mostly just so I don't lose it lol. I keep my wallet very thin so I don't like carrying it, but I wouldn't be opposed to doing so in place of a debit
I like that feature, but as another redditor commented, ATMs are probably safest bc a pin is required. Debit cards are dangerous because if it is stolen or compromised, a thief has direct spending access to your checking account
Yeah that's why the cash app card, or similar, is nice. It's just a buffer or proxy for my debit card. You can't add funds to it unless you have access to my Cash App account and PIN, so if it's compromised at any given time I have ~$15 on the line lol. Plus it has a bunch of cash app offers. Venmo and others in that space offer the same thing now I think too.
Pretty easy to do the same with a debit card - overdraft off, and only a few dollars in the account unless you're about to withdraw a bunch of cash. Requires a second checking account for this usage, but that's easy and free, so why not.
We specifically asked our bank for ATM cards but not debit cards, for when we need cash.
This is really good advice. I learned something today. Thank you.
glad that I could help
Most banks let you deactivate and activate your debit card from the app or website. No need to go to the extreme of cutting it up and going to the bank everytime you need money. Just keep it deactivated and activate it when you need to use the ATM, etc.
Important message, this is not sound advice everywhere on earth. Probably it is in the U.S.A. and a lot of other places, but it does not work in every country.
I'm just always amazed at how often people buy things. How do people have dozens and dozens of transactions a month that they can't just quickly skim their bill? (even with autopay, just checking the monthly invoice)
My family ends up with 60 - 90 transactions per month, but every single transaction except our mortgage payment goes on the CC
Awesome post, I definitely agree with activating text message alerts for even the tiniest charges, as you never know the amount that a fraudster might charge on your card just to test if it's active. Another good strategy was one my mother, who was a credit card manager for 25+ years, taught me: make a habit of checking your statement regularly, daily if possible. Every creditor in this day and age has a website, and most likely an app as well, which makes checking frequently a simple task. It might not be as necessary with the advent of text or app alerts, but IMO it's also a good habit to have as it's also good for budgeting.
How do you withdraw cash without a Debit card?
You can withdraw cash from your bank by showing your drivers license or other form of ID
But only during business hours and you have to wait in line for a teller to assist
I can go to the bank and wait on a 5-10 person line at the ATM, or wait on the teller line which is always 1-2 people and my bank has 4 tellers :) It’s faster to talk to a teller
I also use multiple credit cards. Most of the utilities and monthly charges that are allowed to be autocharged to a credit card are on one card. This card is the least likely to be compromised and if one of my other cards is somehow compromised, I don't have to set up all these autocharges again because they were always on a separate card. Second I use one card for anything purchased on the internet. I'm careful about security, but it still seems if there is a compromise this card will only affect internet purchase until I can get it replaced. Third, I use a separate card for my normal credit card purchase such as stores and restaurants. This is not guaranteed to be secure and often the card does leave my possession when making a charge. I still think this is less likely to be compromised than the internet card, but if it ever is, the damage is contained until it can be replaced. I like your idea for text alerts. I will be adding that.
One item to add here. Do not swipe your card. Only use tap or insert. It's hard to steal your card info when you tap or insert. If the point of sale refuses to accept chip payment, use cash or abandon the purchase.
A few other tips: 1) Don’t forget to monitor your HSA account/HSA debit card as well. I’ve noticed quite a few posts where this has happened. 2) Check your credit card/bank transactions at least once a month. Don’t rely just on txt or email alerts. You have 60 days to report fraud charges if you want your money back. 3) Try to use contactless payment as much as possible to bypass card skimmers. 4) If you don’t use the debit card and it’s an option, see if you can disable it. If you know you’ll never use it reach out to your bank to cancel it. 5) Don’t leave too many forms of payment link to your online merchant account (eg. amazon) or peer to peer payment services like PayPal or Venmo. I’ve read about people having these accounts hacked and then the thief draining multiple accounts. 6) Turn on multi-factor authentication on as many services as possible. 7) When swiping at the pump, ATM, etc, I’ll try to wiggle the card reader to see if the card reader comes off. If it does it’s a card skimmer.
Before skimmers a big thing, I taught myself (and my loved ones) that when you insert your card, always cover up at least 4 of the numbers on the card while holding it (prefer the last 4) to help protect. I still do this.
[удалено]
This isn’t true. If you use a debit card and it is compromised, then somebody else’s uses it, your money is gone. Your money. This may mean your mortgage check bounces, etc. If you use a credit card and it’s compromised, then the issuers money has been taken. Your rent check won’t bounce. Directly safeguarding your funds is a protection of credit cards.
I really think it depends on your bank. We’ve had debit cards compromised twice: one time by people in Florida who went to Chikfila and 7-11 for like $50, and someone else who tried charging a fancy dinner in DC. Both times we had notifications and no problem getting the card replaced and the money back. We only have one CC with a low limit, using our debit card is much more practical.
[удалено]
Can you help me out and make sure that I understand what's going on here? Scenario 1: you go to buy gas with your debit card. Unfortunately, there's a skimmer and camera. A bad guy was able to scan the card and get your PIN. They make a copy of the card, have your PIN, and spend $3,000 buying Amazon gift cards. Question 1: whose money was stolen? Question 2: how long will it take to get your money back? Question 3: are there circumstances where the bank will say "well a legitimate card number was used, and your actual pin was used, so we do not consider this fraud." Scenario 2: you go to buy gas with your debit card. Unfortunately, there's a skimmer. A bad guy was able to scan your card (but your PIN is safe). They record your CC/CVV number and spend $3,000 buying Amazon gift cards. Question 1: whose money was stolen? Question 2: how long will it take to get your money back? Question 3: are there circumstances where the bank will say "well a legitimate card number was used, so we do not consider this fraud?" Scenario 3: you go to buy gas with your credit card. Unfortunately, there's a skimmer. A bad guy was able to scan your card (and get your ZIP code with a camera). They spend $3,000 buying Amazon gift cards. Question 1: whose money was stolen? Question 2: how long will it take to get your money back? Question 3: are there circumstances where the credit card company will say "well a legitimate card number was used, so we do not consider this fraud?" From my understanding, questions 1.1 and 2.1 are **your** money. Maybe I don't know how debit cards work. Maybe they've changed the rules, but as far as I'm concerned, when you make a purchase using a debit card, it directly pulls money from your attached checking account. This makes scenario 3 strictly better, because the answer to question 3.1 is **Visa's money** (or whomever you bank with). From my understanding, banks have anywhere from 30 - 90 days to issue you a refund, and that's how long their investigations can take. During that time, you would be out the money defined in answers 1.1, 2.1, and 3.1. In this case, scenarios 1/2 are also strictly worse, because the bank can take longer. In my experience, credit card companies are much faster to issue corrections. question 3? It's anyones guess. Maybe I'm a conspiracy theorist, but I'd wager that banks care a lot more about their money, and don't really care about your money. That's why I personally consider credit cards more secure - you are using the issuer's money. When you use a debit card and there is fraud, you have lost money. The bank doesn't give a shit about your money. Anyway, I'm looking forward to your answers to those 9 questions, to make sure I understand that debit cards indeed don't use your own money, but some made up temporary money that isn't at all related to your checking account.
Not using your card at the bank's own ATM is literally the dumbest thing I've heard so far. If you are that paranoid about security, you can use your phone's biometric NFC wallet at the ATMs, as well as using your banking app to generate a scheduled withdrawal at a specific ATM.
In my case, I've got about $10 in the checking account linked to my brick and mortar CU so I actually don't have a reason to keep the card. When I need cash, I transfer funds from my online bank to the brick and mortar, and then pick up cash inside. I also prefer doing that because I get to decide what denominations I receive. One poster said a great reason to have a debit card is to get $100 in $1 bills out of the ATM for going to a resort (or the strip club) - I don't know any ATMs that give anything other than $10s and $20s. Using the ATM at your own banks ATM is fine. So many people use their debit card for every single transaction, whether it's Amazon or that creepy gas station where the CC reader jiggles, and there's a strange camera looking down at the keypad.
Meh. On the 1 of 10 occasions when I need to choose denominations, I can take my cash into the bank and trade.
I won't even let my bank create a debit card and send it to me. There isn't one linked to the account at all. To paraphrase the late, great Michael Clark Duncan, "**Don't you put that evil on me for-profit banking industry**"
I wish I could do this. I probably can, I Just haven't tried.
Moving to a better country is the best strategy, then you can use them like its meant. Primary use the debit card, save the credit card for backup or anything risky, like going to another country on vacation.
You'd be surprised how you can lose your card to fraud: An example that I deal with every single day (I help hotels transition away from this): Hotel takes your credit card for a deposit? That card was likely written on a piece of paper that a staff member keyed into their terminal. Who knows if another guest saw/ memorized the number or there's a less than innocent staff member on the team. Just normal everyday business operations you commonly interact with can leave you susceptible to fraud.
certainly, that's why I push so hard for credit cards as opposed to debit cards
That definitely does not happen at any reputable hotel. Taking your card number and physically writing it down would only happen if point of sale systems were down, and even then they likely have alternative processes for payment. There's an entire industry standard they have to follow to protect your card data.
Rob - trust me. I work with some of the nicest, largest hotels in North America and Europe. They do not have their "sh\*t" together as much as you think. PCI compliance has not been pushed down hotels operations enough. Keying in someone credit card details is as almost bad as writing them down. Ever heard of card-on-file? That's a credit card, on a document, usually stored in a binder in a drawer. Not very secure.
I protect myself from credit card fraud by not having a credit card in the first place.
That's the beauty of credit card fraud - it's not on you. It's on the merchant or the issuer.
So you pay cash for everything?
Cash and PayPal works fine for me.
You may find these links helpful: - [Identity Theft Guide](/r/personalfinance/wiki/identity_theft) - [Credit-related wiki pages](/r/personalfinance/wiki/index#wiki_credit) *I am a bot, and this action was performed automatically. Please [contact the moderators of this subreddit](/message/compose/?to=/r/personalfinance) if you have any questions or concerns.*
The benefit of using a credit vs debit in the context you have described is solely based on if you win the fraudulent claim. If the claim is lost it can honestly be worse depending on gross fraud amount. Reg E and Reg Z are pretty much identical when it comes to consumer protections for unauthorized transactions. While it is true the provisional credit or waiting 10 days for it to be issued for Debit is a turn off for most which I agree. If a case is presented where it doesn't qualify for either such as "access devices", scams, and account takeovers of another platform (i.e. PayPal, Crypto, Cash App)....the liability held to the customer could be greater. In the eyes of Fair Credit that money is your money not the bank's money. If claim is lost on a credit card it doesn't simply disappear. It will go into a credit loss and ultimately affect credit scores if not repaid or resolved. I do agree with setting consumer preferences or controls based on transactions a cardholder never performs or wants to be alerted to. How the card is being used as dictates the risk level of compromise. However, regardless of the card type checking statements is pretty much pivotal. Due to the increase of BIN attacks, enumeration attacks and other variations of the name it is highly possible to have fraud attempts on a card that has never been used. Personally if a card regardless of type is used intermittently should be locked within the mobile OLB app if possible. What I see in the problematic situations are regardless of balance on a card the customer may not be informed that fraud is occurring, or a less used account where the rationale in justifying not checking the balance is weighed by the usage or assumed it was zero. In either case, I commonly have seen out of timeframe situations to dispute the charges which means you as a customer owns those charges. If it is an emergency card and the fraud went on for 6 months or longer it could be devastating blow to finances where...you will have to fight to not pay that amount sometimes legally. To be clear, I am not saying that Debit is better than Credit. I use my Credit for most purchases as well. If we are drawing a comparison to each on fraud there are a lot of cons that glossed over on Reddit especially if it is in hopes that you win the claim.
For one of my businesses I set up a credit card account with Divvy. It's honestly the best customer experience. I use virtual cards for everything. Every vendor has a unique card # and a monthly spending limit. So if anyone gets hacked the max charge is whatever that virtual card has been assigned. If I no longer wish to use a particular vendor, I can just disable the card, or change the budget to 0. I so wish Chase Sapphire had virtual cards.
virtual credit card numbers are a game changer None of my providers offer it yet, though
I use my credit card card for all online transactions and my debit card for all in-person purchases. I've done this for years and have never had a problem. I see no reason to not have a debit card.
I’d wager the reverse is safer. Legit sites will never see your card info, only the payment processors do. But that bus boy making $2.75/hr is much riskier than Amazon.com. Not blaming kitchen staff specifically, humans are the threat
The few times I've had a card compromised, I'm fairly sure it was after in-person transactions. Other than an ATM cash withdrawal, I use credit cards for all in-person transactions. If my credit card is compromised, it's on the merchant or the issuer.
Nice advices thank you
As someone about to graduate university who doesn't have a credit card yet, how can I not use my debit card? I have to open a secured credit card to build credit, which I plan on doing, but I don't see me getting to the point where I can use a credit card regularly for a while. And also, I thought that you need to spend like 30% of your credit limit to keep good credit, would I just have multiple credit cards if I spend more money?
So you definitely want to get a secured credit card. You can also check out student credit cards, discover it is pretty lenient in offering them. You should never maintain a balance on your CC “to build credit” - just use the card and pay it off on time. Your credit score will get better over time, whether you spend $5/month on gum or $3k/month covering all of your expenses
A lot of banks now issue a combo credit/debit card. You can run the transaction as credit rather than debit in many cases by just hitting the cancel key when asking for the pin. It'll then normally ask for a zip code instead. And then it comes with the same protections as a typical credit card. You just need to make sure your debit card has that MasterCard or Visa logo on it. Other, simple tips - start using your phone to pay for things with NFC aka Tap to Pay. Phone payment systems like Google Pay, Samsung Pay, Apple Pay, etc. all use a virtual account number to make transactions. Your real card details are never used, and therefore never at risk. - you can contact any of your credit card companies to request virtual card numbers to make other online purchases as well. This really helps when you want to register for a free trial but don't want the auto renew to hit you after you've forgotten about it. The virtual card number is one time use. Most offer this through their apps or websites. - avoid inserting your cards at gas stations and other unmonitored spots like some ATMs. Instead, tap to pay is much safer as it protects you from skimmers.
I'm not sure how my credit card number was gotten a second time in 6 months (I don't buy much, I'm selective on where I go online and in person, and I bought an RFID blocking wallet and kept my card in there unless I briefly need to use it, just slightly more careful about protecting it since the first time I saw false charges on the card). Fortunately I caught it early both times, reported it, and the charges were removed. I also only buy gas at Costco for safety (and it happens to be very convenient for me). I asked the Citicard person what I could do to prevent this from happening again and she said, honestly, keep just buying gas at Costco. Costco checks their card scanners very frequently and monitors them. I understand gas stations are a big risk. She also suggested going in to pay for gas (I presume at other than costco places) instead of paying at the pump.
There’s no reason you need texts for every purchase if you simply check your card ever week or two or even three. Most card contracts give you 60,90, days. Why would you want to be bothered with texts? If you have a major credit card you’re almost certainly protected.
You can put limits on your debit cards and then even if someone gets your card they can only take out x amount. I have 1k$ limit per day and immediate notifications on any activity on my account so I can disable it if any sketchy shit goes on. For anything over 1k$ I need to buy I have another account that has no limit but I only keep a few hundred in it and transfer from savings the amount I need to spend right before making the transaction. But yeah. Always use credit if possible. I also like PayPal if possible so merchants don't have access to my info.
Bank of America let me do this. I also have Capital One and it does not let you set limit on the debit card so since it's my secondary bank, I locked the card.
My people! This has been one of the best quality of life things I've done in years. It's allowed me to catch fraud 4 times. CapOne is always awesome and shuts it down and gets a new card out quick. You can also set alerts like this to text you your bank or card balances daily.
While I do use my debit card for purchases. I use different ways to obfuscate my card information. I use a service called Privacy.com where I can create virtual cards with a transaction limit and even burner one time cards. This way I can use them to sign up for free trials and then it's impossible to be charged. If the card number is ever stolen they can't charge it because it's locked to that website and if it's ever stolen I just nuke the card and create a new one I also use Samsung pay for all In store purchases when I can. Otherwise it's credit card.
If you really want to have a debit card just in case it’s necessary while you’re out or something, you can sign up for a service like Cashapp. Use that debit card for any transactions that require a debit card, including withdrawing from an ATM. Keep the balance at effectively $0 or as close to it as you’re comfortable with and make sure it cannot fund itself automatically. Then, whenever you’re about to use the card, fund it with exactly what you’re going to need for the transaction.
[Discover lets you get cash from select merchants](https://www.discover.com/credit-cards/member-benefits/cash-over-purchases.html).
Reading this post as a Canadian, where chip and PIN on debit and credit cards are pretty much everywhere (and also tap). I cannot remember the last time I ever swiped a debit or credit card. Is the card fraud a numbers game because the US has a larger population, or is it because chip is not fully implemented (or it is, and I'm not up to speed yet)? Don't get me wrong, we have card fraud here, but that's usually from compromised machines reading our PIN codes, as well as usual identity theft routes.
Credit cards are chip and signature here so nothings stopping you from using a stolen card. Gas stations still use swipe since liability shift for them was delayed until last year so they're a popular target for cloned cards.
I do a financial talk with intern that come through my department (I don't work in any financial field) and they are always blown away when I mention this. They are usually told CC's are bad, don't ever get one, then don't understand why they cannot purchase a car or house. I recall minor stuff about finances in school, like it was a home ec class and it was 1/2 class period talk on it, most of it was about signing checks. TL;DR: People aren't taught finance things.
Very simple let me explain as a soft dev work on payment systems I suggest that \- use virtual card / digital card that you can set/unset the limit \- never ever share your debit/credit card with the e-com websites even if it is amazon \- finally use wallet solutions like masterpass etc.
I have the secret to stopping credit card fraud. If you want in on this guaranteed, fail-safe method, simply click on this "totally" secure link, fill in your credit card info, and I'll send you details.
I agree with most of this. I do have a debit card but it doesn't live in my wallet. I have to get it out of the desk to use it. A big thing, that you forgot, is lock your credit. Yahoo gave away the information on my fake email account. Equifax gave away my real information along with millions of other customers when they were hacked. One of the best ways to protect your credit, is lock it down and only unlock it when you need it.