Not Made Of Money

Have you thought much about what you should do to protect yourself when using your debit card? Lots of finance people talk about the dangers of using (and abusing) credit cards, but very few people discuss the things that can go wrong with debit cards. Like any financial tool, debit cards need to be used in a cautious manner.

Now, don’t get me wrong. I love my debit card, and I use it regularly. I’m certainly not saying that you should abandon using yours. There are just some things that you should know to keep an eye on.

Some people believe that as long as their debit card is approved, they must have enough cash in their account to pay for their purchase. That’s not always the case, though. Some debit cards will allow you to overdraw your account and then charge you a hefty overdraft fee. You can, however, opt out of that option. Call your debit card service company (their number is probably on the back of your card) and make sure that you know what happens when you run out of money.

Fraudulent charges are handled differently with debit cards than they are handled with credit cards. What does that mean? When you lose your credit card (or the number is compromised) and someone else makes charges to your account, you are usually protected by your credit card company from those charges. You simply have to notify your card company that those charges aren’t yours. The rules change a little, though, when you discover unauthorized charges to you debit card. You only have a few days, in some cases, to notify your bank that your card has been compromised.
Otherwise, you could be out the money even though you didn’t make those purchases. I recommend having online access to your checking account and checking it regularly. The quicker you can tell your bank that something is wrong, the quicker you can stop any potential losses.

Finally, using your debit card online can be a problem if you aren’t careful about the websites you choose to utilize. I make it a habit never to use my debit card when making purchases online. I either use my credit card or a payment system like Paypal to ensure that my information is protected. I also shop at only the “larger” well known sites, although there is no guarantee that these large companies won’t have problems (as shown by the scandal endured by companies like TJ Maxx last year), I feel much more secure using my card with them than I feel using it at an amateur, no-name website.

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