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Thread: debit card article by Clark Howard

  1. #1
    Aruba since 1979
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    debit card article by Clark Howard

    By Clark Howard
    ClarkHoward.com

    Debit card account fraud is on the rise. I want to tell you the best way I know to protect yourself.

    Years ago, the bulk of financial fraud involved credit cards alone. But now some 40% of the fraud involves debit cards, while the remaining 60% is with credit cards.

    If your credit card is compromised, the harm to you is relatively small. You contact the issuer to report false charges and you may have to do some paperwork, but no money leaves your hands.

    With debit card fraud, however, there is money that leaves your hands. And you have to fight to get your own money back. Unfortunately, it's now taking longer and longer to get that money back.

    Under the law, banks have 10 business days to give you your money back in the event of debit card fraud. Visa and MasterCard, however, have set their own standard of 5 business days if a compromised debit card has either logo on it, as most do. Yet I'm hearing from callers that the true wait time to get your money back is substantially longer than either 5 or 10 business days.

    Now, I know debit cards are popular because people got in over their heads spending money they didn't have on credit cards. Debit cards, in theory, allow you to spend only what you have.

    But the problem comes if a crook cracks your debit card. Then you have no money to pay your mortgage, your car loan or to buy gas or food, among other things. Your checks start bouncing and, depending on your bank or credit union, the institution may not cover the bounced check charges that result from debit card fraud.

    You now have a 1 in 65 chance of having your debit card compromised. A new study from Symantec says retail is the No. 1 place where you account can be compromised, when crooks hack into databases that contain the numbers from debit card transactions.

    If you are someone who would be financially devastated if your bank account were emptied, I suggest you open a second account and tie your debit card to it. Then fund the second account only with money that's used for debit card activity, so your principal account won't be at risk in the event of a breach.

    That's the best way I know to protect yourself.





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  2. #2
    Senior Member danadog56's Avatar
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    Having a seperate debit account is a good idea...might have to jump on it.
    ARUBA....HOME AWAY FROM HOME

  3. #3
    Senior Member Arubalisa's Avatar
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    We try to use credit instead of debit when possible because we have have been listening to "Clark" for the last 12 years

    Clark also suggests if you do not have restraint when it comes to use of credit cards --


    "So I recommend they put the credit cards in a recloseable freezer bag, fill it with water and put the bag in the freezer. Putting them in a block of ice is a good way to make sure they aren't used. "

  4. #4
    Senior Member AndyM's Avatar
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    We use credit cards for most stuff when traveling. We pay for much of our travel with CC points so charging while on vacation just adds to the benefit. When the bill comes in we pay it off. Of course this only makes sense if you pay off the bill in full when you get home.

    We have Capital One Venture cards. Double points and no currency conversion charges (not usually an issue in Aruba as most places charge your card in USD).

    If you were planning on taking a debit card or travelers checks, bank the cash and use your CC.

  5. #5
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    I like Arubalisa's suggestion re: "putting the credit card in a recloseable freezer bag; fill it with water and put it in your freezer."

    Ed

  6. #6
    Senior Member Arubalisa's Avatar
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    5 more places you should never use a debit card

    Among a few things mentioned

    "At the car rental counter
    Pamela Yip of The Dallas Morning News found that it's standard practice (and completely legal) in the industry for car rental companies to do a hard inquiry on your credit report, often without your knowledge or consent. They're trying to protect themselves against auto thieves that love to use debit cards as a low-risk method to get rentals that they can steal. But that inquiry can drastically lower your credit score in the process. The simple solution is to use a real credit card instead.

    When booking advanced travel
    If you have concerns about the solvency of a company you're buying future travel from, you're better off using a credit card. This holds true particularly during an economic downturn when leisure travel businesses like cruises and some airlines can go bust. Paying with credit card ensures you can do a chargeback if you don't get the travel you paid for.

    While we're at it, have you considered trip insurance if you're taking a cruise, a tour, or traveling on a trip that requires pre-payment of thousands of dollars?"

  7. #7
    Senior Member Arubalisa's Avatar
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    Turn off the debit function of your debit card

    "Bank of America, Chase and Wells Fargo all give you the option to turn off the POS function on your debit card upon your request. Citibank currently does not. "

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