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Follow these tips, and maybe consider using your credit card instead.
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In some ways, debit cards are extremely convenient. They generally come free with your checking account (and sometimes with savings accounts and money market accounts, as well), and you don’t have to apply for one like you do for a credit card. They’re tied directly to your bank account, and while you do have to be mindful of not overdrafting the account (spending more than what you have in it), you don’t have the same possible temptation to overspend as you might with a credit card.
Unfortunately, debit cards lack the same level of fraud protection that you’d get with a credit card, so it pays to be extremely careful about using them in certain situations. Read on for some tips to help you keep your money safe when you use your debit card.
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1. Choose ATMs (and gas pumps) carefully
One of the things you can do with a debit card that isn’t recommended for a credit card is take out cash at an ATM. When you do this with a credit card, it’s called a cash advance, and it results in a fee and immediate interest charges. In short, this is a move to avoid unless you have absolutely no other option. Your debit card, on the other hand, is the perfect way to take cash out. Just be careful about which ATM you choose to use.
Some scammers will install a card skimmer in the card reader part of an ATM (or sometimes in gas pump payment machines). These devices “skim,” or capture, the data on your card as well as your PIN, if you entered it. Then these nefarious types can use that data to drain your bank account.
How do you avoid this fate? It’s preferable to use the ATM at your bank, as it will be monitored well by staff there, and may even be inside the building, cutting down on the chances that it’s been tampered with. Free-standing ATMs inside random businesses are riskier (and besides, you might also be charged fees if you use an out-of-network ATM).
If you decide to pay at the gas pump using your debit card, choose a pump that is visible to the staff inside the on-site store, to cut down on the chances that it’s been messed with. And look carefully at the card readers for ATMs and gas pumps. If the mechanism is loose or damaged, or anything looks fishy, don’t use it.
2. Protect your PIN
Your PIN (personal identification number) is the key to unlock the money in the accounts linked to your debit card. As such, it’s extremely important to keep that number safe. When you’re entering it, shield the keypad with your hand, wallet, or purse. If you have multiple accounts, it’s a good idea to have different PINs. And don’t ever write it down to keep with you, especially not on the card itself!
3. Use your debit card as “credit”
On the subject of your PIN, if you have the option to use your debit card as “credit” instead, you won’t have to enter it for a purchase, and may be asked to sign a receipt instead. This option sends your payment through the merchant’s credit processor, often Visa or Mastercard. This usually results in extra fees for the merchant, and it means the payment is processed offline, with the money leaving your account in a few days, instead of instantly when you pay via the debit process.
Note that selecting “credit” doesn’t turn your debit card into a credit card — it’s just a different way of processing the payment. But it means you won’t have to enter your PIN and will instead sign a credit card slip (or an electronic screen), cutting down on the odds that your PIN is exposed.
4. Sign up for alerts from your bank
Knowledge is power, and to that end, a good way to avoid debit card fraud is to sign up to receive text or email alerts from your bank. You can opt in to receive notifications when there’s suspicious activity on your account, which could be an indicator that someone has stolen your card information.
5. Consider using a credit card instead
Finally, the surest way to avoid debit card fraud is to not use your debit card, and instead keep it in a safe place rather than carrying it around in your wallet. Credit cards can be dangerous in their own way (such as by enabling you to rack up debt you can’t afford), but they also offer much stronger fraud protections than debit cards, and can give you flexibility to make bigger purchases. And of course, they can help you build credit and earn cash back and rewards on spending you would have done anyway. Consider saving your debit card for taking cash out, and using a credit card for purchases.
It’s a scary world out there, but following the tips above can help you keep your debit card — and your money — safe from the threat of fraud and theft.
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