A bit of an extreme question, yes, but nothing focuses the mind like theft. Actually, this personal finance blogger highlighted the differences between having your credit card and debit cards compromised and the strategies she took after having her account hacked…for the fourth time.  Here is her story of her debit card fraud:

I opened my banking app to deposit a check, and a jolt went through my system. My checking account had suddenly dropped by $600. I scrambled to check recent transactions and noticed two large ATM withdrawals had been made for $300 each the day before – transactions I had not made.

Two minutes later I connected with my bank’s customer service department and reported the fraud. I was given a $600 temporary credit on my account while the bank investigated and ultimately found me not responsible for the transactions. I didn’t know the thieves, but I could immediately identify how and where my card had been skimmed.

In an attempt to mitigate risk, I rarely use my debit card because I know it’s more difficult to deal with and flag the fraud than it is with a credit card. For that reason, I only use a debit card to take out cash. I used my debit card at an Allpoint ATM in a local convenience store to avoid an ATM fee. That ATM had a skimmer on it and stole my information. So I had $600 stolen in exchange for saving $3.

As to why she would prefer to have her credit card stolen (instead of her debit card), her main issues are 1) liability 2) fear over someone having access to her bank account:

Debit cards have slightly different fine print, which could leave you liable when it comes to fraud. The amount you could be held responsible for differs based on when you report the fraud. If your card has been stolen and you report it before a charge is made, then you have no liability. Otherwise, it could cost you $50 if you report it within two business days or $500 if it’s more than two business days but less than 60 calendar days after your statement is sent to you. And if you wait 60 calendar days after your statement is sent to you, then you are 100 percent liable for the losses incurred.

For this reason, I only use credit cards if I don’t pay in cash. Besides the liability factor, I’d prefer thieves to not have direct access to my bank account.

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Check out this NGPF Activity: Pick a Payment Method

About the Author

Tim Ranzetta

Tim's saving habits started at seven when a neighbor with a broken hip gave him a dog walking job. Her recovery, which took almost a year, resulted in Tim getting to know the bank tellers quite well (and accumulating a savings account balance of over $300!). His recent entrepreneurial adventures have included driving a shredding truck, analyzing executive compensation packages for Fortune 500 companies and helping families make better college financing decisions. After volunteering in 2010 to create and teach a personal finance program at Eastside College Prep in East Palo Alto, Tim saw firsthand the impact of an engaging and activity-based curriculum, which inspired him to start a new non-profit, Next Gen Personal Finance.

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