Americans made almost 68 billion transactions with debit cards in 2016, according to The Nilson Report – more than any other payment method. While many consumers choose to use a debit card to avoid accumulating credit card debt, you may not be aware that you could lose more hard-earned money through debit card fraud than if you used a credit card for a purchase.
As you probably know, when you make a purchase with a debit card, the money is taken instantly from your checking account. If someone fraudulently uses your debit card number, you could be responsible for some or all of their charges. According to the National Consumer Law Center, if a consumer’s debit card has not been lost or stolen but there are unauthorized charges on their account, they will be protected if they report those charges within 60 days of when the statement was sent. When a physical card goes missing or is stolen, consumers have just two business days after learning about the loss to notify the card issuer; those who do so will limit their losses to $50. Otherwise, they could lose up to $500. If they take months to notify the bank, they may not recoup any money at all. S
Many banks have improved their debit card protections for their customers and will go beyond the above rules and not make consumers responsible for any charges deemed to be fraudulent, especially if they report the unauthorized transactions as soon as possible.
Here are some rules for keeping your debit card safe:
Check Your Bank Statements Often
Since time is of the essence to receive full fraud protection from your bank, make it a habit to review your bank account online at least once a week, or even daily.
Protect Your PIN Number
Don’t give your personal identification number (PIN) to anyone who asks, and don’t keep it written down anywhere in your purse or wallet. Don’t use your PIN at the gas pump: Use your card in the credit purchase function to avoid someone seeing it. In fact, using your debit card in credit card mode may offer you extra liability protection depending on your bank.
Consider Avoiding Debit Card Use Online
Some consumers choose to use only credit cards online since a fraudulent credit card transaction takes more time for your bank to process and can become an item of dispute rather than an instant removal of cash from your checking account. The Federal Reserve Bank of San Francisco recommends checking for a security symbol such as an unbroken key or a padlock on each website before you order anything because these symbols mean your information will be encrypted and therefore safer. Also, make sure the website address begins with https://. Do not make a financial transaction on a site that doesn’t have the “s” following http, an indication of a higher level of security.
Only Use ATMs at a Bank
ATMs located in convenience stores, subway stations, airports, and other places have a greater risk of having a “skimming” device attached by a thief, which could intercept and store your debit card data. This sometimes happens at banks, too, but it is easier to do in a place without surveillance cameras.
Don’t Use Public Wireless Access for Financial Transactions
Make sure you are using a password-protected wireless signal to check your bank account balance, pay bills and shop so that hackers have less chance to capture your password and account information.
Report Problems Immediately
While you would certainly report it right away if your wallet was stolen and your credit and debit cards were missing, you should also report any unauthorized transactions immediately. The faster you report a problem, the more quickly you can cancel your debit card and prevent additional charges.
Consider Filing a Police Report
If your debit card is stolen, you may want to contact the police and keep a copy of the police report so that you have extra support when you want your bank to reimburse the charges.
Create Your Own Security Profile
As long as you remember the answers, you can make up anything you want for your security questions. Using a pet’s name or your mother’s maiden name makes it too easy for cons to get into your account. The answers just have to be consistent; they don't have to be true.
The Bottom Line
While you may find constantly using a debit card to be a great convenience, it won’t be so convenient if someone manages to drain your checking account. A little bit of vigilance and some new habits can go a long way to preventing a damaging debit card experience.