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We now use our debit card for everything. I watch my account daily, sometimes twice a day, and we get reimbursed if anything fraudulent on there. I have filed a debit card claim against a company once for goods not received, the bank gave me my cash back same day or overnight (it was $1700 - about 8 yrs ago) while the quick arbitration went on. I also have alerts set up for transactions over a certain amount. I'm over the mental clutter of constantly paying off our credit carsld - just one more thing to do.
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I'm not sure it's worth the hassle to monitor debit cards like a hawk... credit cards offer rewards / cash back, and you have far better consumer protection.
To me, it's just not worth the hassle to expose yourself to debit card fraud.
https://www.washingtonpost.com/business/get-there/beware-the-debit-card-crooks-with-new-technology-hacking-is-easier-than-ever/2017/07/21/fca95a22-6c96-11e7-b9e2-2056e768a7e5_story.html
Under the federal Electronic Fund Transfer Act, if you report that your card is missing or stolen before someone uses it, you are not responsible for unauthorized transactions.
But if someone uses your debit card before you get a chance to report the fraudulent activity, your liability depends on how fast you spot the hack. Within two business days the most you could be held liable for is $50. Wait longer to notify your bank and you could be on the hook for up to $500. If you report the loss 60 days after receiving your bank statement, you may not get back the money you lost.
And even if you do report the loss right away, it can take a while for the bank to investigate and replace your funds.
Sorry, I didn't have a chance to respond to this sooner. I typed up something and then the system timed out.
I think this article is behind the times. A debit card is no different than a credit card. It has chip technology and there are other means of avoiding giving retailers my card - like the mobile pay options where a new unique code is provided and my actual card number is not used. I have $0 liability protection on my card as long as it is reported promptly. Also, I can deactivate my card through my bank's mobile app. I can set alerts for transactions over a certain dollar amount. We use cash if it looks seedy. Taking normal precautions will get you far.
The banks push the responsibility back to the retailers to avoid fraud at point of sale (checking ID, enforcing chip use, asking for zip code (that's a weak one anyway), etc). If there was a dispute, the money comes out of the retailer slush fund (every day the retailer is getting new money from other people's credit/debit card transactions). Having intimiate knowledge of how this process works, the banks simply take the money back from retailer in question and balance it out by giving it to you until arbitration is over - it's just a series of debits and credits to the bank.
My own experience of getting my money back when I had a dispute with a retailer ($1700 on my debit card) was that my money was back in my account within a few hours of filing the case or by overnight, which I think is expeditious. That was also 8 years ago. So I would imagine it would be just as fast. I just think this article sounds biased. No offense.
Here are some other things:
- if some fraudster gets my debit card #, there is a max daily amount. I can adjust this myself. If I large purchase coming up, I can temporarily raise it to cover my expense and then go back to my day-to-day. My credit card is an open ended 34k - I don't know if there is a daily limit on what can be spent. Sure, bank might get suspicious, but is there a ceiling on purchases if not caught by the bank sooner?
- We don't have overdraft set up on my checking. If it's zero, it's zero. No one is gonna go much further than that amount I have in my account anyway.
- A good chunk of fraud happens by a family member or someone you know within arms length. The article does not state if the people cited were due to some kind of arms length transaction (which will delay getting your funds back due to your account).
- Zero liability if reported promptly
- I like big banks. Fraud area is one of the fastest growing areas within big banks (maybe for small banks, too, I don't know) and where more money and resources are going to. I like the 2-step verification, voice ID, ability to shut my debit card off temporarily through my phone or online. I can tell you that our other bank (also a medium/large-ish one but obviously, to me, outsources many capabilities and uses similar platform as other medium banks that don't want to build in-house capability) feels very behind the times compared to one of our main daily use mega bank. That makes me uneasy.
- Setting alerts for certain dollar amounts. Yes, this applies to credit and debit
To your other point, I don't happen to check my accounts actively for fraud, it's not something I think about, but just happen to check each day as I keep an eye on the markets.
I am far, far more concerned about someone opening an account fraudulently in our names, which is why we have frozen reports on and off for years, routinely check our credit reports, etc. Thanks to your article, I also stepped up the IRS registration for myself.
We have exclusively been doing the debit card for only a month now, and I think it is one of things that has simplified my life. Even though we had the cash to pay off our credit card every month (and have not paid a dime in interest since I was stupid at 25), it also took up mental space. How much do I owe? Did my payment go through? Did I pay the right amount to avoid interest? Should I pay now or closer to the due date? I get that not everyone has these same thoughts (my husband is an example of someone that does not think like this), but it is just not how my brain works. Right now, I feel so effing rich that I want simplification.
If we do travel hacking, I have found that the most bang for our buck happens when we open new cards for the new account opening bonus, not the ongoing use of cards. YMMV. But it's not worth the hassle to me anymore. I like to be done and done after I pay. In 20 years use of a debit and/or credit card, I don't think I have ever had an actual fraudulent charge (and this includes extensive use of travel all over the world). Will it happen in the future? Yes, but I am not losing sleep over it as I feel on top of my game and am far more educated.
We will disagree on this topic and I am sure others will weigh in also disagreeing with me. It's our accounts, our life. Didn't rich off of using my credit cards. We will continue to do 'one off' travel hacking of opening new credit accounts, but it will not be daily use, but rather a planned all at once kind of thing. I want simplification. Too effing 'rich' to care anymore. LOL. We only have so much time on this planet, it's not how I want to spend my time.
Hope this helps explain my position. Sorry for long note. Lots of points to discuss!
