If you receive a fraudulent charge on your credit card, contacting the bank that issued the card allows you to decline the charge and have it removed from your account. Since a credit account is essentially a managed debt, the removal of the charge erases that portion of the debt and you don’t pay any money out of your pocket.
If you receive a fraudulent charge on a debit card, however, the charge is applied directly to your checking account and the funds related to the charge are withdrawn. Instead of being another portion of a debt account, the charge takes actual money from your checking account; money you’ll have to do without until you can prove that the charge was fraudulent and the bank credits you with the amount that was stolen. It can be difficult to recover funds lost to debit card fraud, and it may take months for you to get your money back.
Part of the problem is that many people don’t draw a mental distinction between a debit card and a credit card, assuming that both cards offer the same level of protection when it comes to fraudulent charges. This can result in individuals engaging in risky behavior without even knowing it, using their debit cards in situations where they really shouldn’t because of the possibility of fraud.
Some suggestions to help you protect your debit card accounts:
- Know where your card is at all times and keep it secure.
- Avoid using debit cards when shopping online, or anywhere your card is taken out of your sight for processing (ie, restaurants).
- If you have the option to establish your own PIN for your debit card, do not use obvious information such as birthdate, portion of your phone number, or a portion of your Social Security number.
- Don’t carry your PIN in your wallet or purse or write it on your ATM or debit card. Instead, commit your PIN to memory.
- Carefully check ATM or debit card transactions before you enter the PIN or before you sign the receipt; the funds for this item will be fairly quickly transferred out of your checking or other deposit account.
- Periodically check your account activity, especially if you bank online. Compare the current balance and recent withdrawals or transfers to those you’ve recorded, including your current ATM and debit card withdrawals and purchases. If you notice transactions you didn’t make, or if your balance has dropped suddenly without activity by you, immediately report the problem to your card issuer.
Debit cards are a great tool when it comes to giving you access to money in your bank account, but it’s important that you make sure that you’re the only person that your card is giving that access to.