Debit Cards – Tips to Avoid Debit Card Fraud
With the current economic downswing being experienced by economies across the globe, people everywhere are feeling the pinch financially. In a climate of increased unemployment and job insecurity, people are beginning to wise up to the fact that continuing to get deeper in debt is not a healthy way to live.
The introduction of debit cards from MasterCard and Visa are gaining in popularity. These cards are not to be confused with credit cards; they operate on the simple principle that if you have money in your checking account, you can shop and pay for the stuff you buy using your debit card. In this way you don’t owe money and are not increasing the burden of debt.
One major advantage of the debit card is that you don’t have to carry around a big wad of notes. You just carry your card and swipe it when you make a purchase. Your checking account is immediately debited for the cost of your purchases.
It is important to be aware of the riskiest places to swipe your debit card and you can make use of the information below to protect yourself from debit card fraud.
ATM gas pumps: It is recommended that you use a credit card to pay for the gas you buy instead of your debit card. Fraudsters use a technique called skimming to locate and steal PIN numbers and then take money out of your checking account.
Choose credit cards over debit cards: Research has shown that it is far better to make purchases using your credit card and pay off the full amount each month, rather than using your debit card. While a fraudster can still misuse your credit card information, the bank or issuing agency insures your account against fraud. In the case of debit cards, the money goes directly out of your savings account.
Overdraft protection: you would be wise to deactivate the overdraft protection option that links debit cards to savings accounts. If you have a large amount of savings in your account, even the bank will advise you to de-link your savings account from your debit card. You can always open another savings account with a small balance and link your debit card to that account. This is useful if you plan to take an overdraft because it avoids you having to pay overdraft fees. If you don’t need it, don’t take it.
Avoid the non bank ATM machines: choose only ATM machines that are attached to a bank and protected by security. Isolated machines found at supermarkets and fairs among other places are dangerous and more vulnerable to fraud.
The main disadvantage in using debit cards is when a fraud happens and money gets stolen, the money comes right out of your personal account. In the case of credit cards the money is being stolen from the Credit Card Company or bank. With debit card theft, the bank will charge you an overdraft charge if the amount of money taken from your account exceeds what you actually have.