I posted the article below a few years ago, and you can tell by the comments that it ruffled a few feathers… but with all the issues with Zaycon in the last month this post came to mind.  I have heard from so many of you that paid online with a debit card and the banks won’t refund the money since the purchase was past a certain time frame.  My first response (that I don’t type back in the email) is “Why are you using a debit card online?!!!” after saying that out loud, though only to myself, for 50+ times I thought it was time to repost this.

Originally published Feb. 3rd, 2015:

Yesterday we got the dreaded phone call, “Did you buy $500 in stamps and then make purchases for $400 in shoes in Africa last night?”  Umm… NO!  I give you permission to cry.  I did! Someone invaded our little world and while they didn’t break into the house they did burst my happy little secure bubble.

In the end after a couple phone calls everything is fixed.  The card is closed. A new card is being overnighted to us. Best of all, we are off the hook for all of this person’s stealing.  Things could have not ended so nicely though.  If we had used a debit card things could have ended with me in more tears and us out a chunk of money.

I know everyones favorite financial guru says that you shouldn’t have credit cards, but I would argue that you shouldn’t ever use a debit card.  Ever.  We’ve not used ours in so long I don’t even remember the pin!

As long as you are smart and pay off your credit card every month you should use your credit card for every point of sale and online transaction you make.  Why you say?  Well look at the news recently to see how many point of sale issues stores have had losing data to hackers.  Target, Home Depot, Michaels, Harbor Freight, Sally’s Beauty Supply.. the story is all the same.  Its the little machine where you swipe your card that is giving away your data and in some cases (Target’s) they also have the pin you entered!  It’s not just your card number, though if you used a debit card.  It’s a direct line to every dollar in your checking account.  Even if you got the bank to give you all the money back what happens in the mean time when you have a mortgage payment due?

What are your options to pay safely?
The way I see it you have four choices.

#1 – Pay only with cash.
Reasonable decision but unreasonable to do long term.  Now you are visiting an ATM all the time (also not secure places) or the bank on a very regular basis.  Also if your purse/wallet gets stolen you are 100% liable for the theft and lost all funds.

#2 – Use your debit card.
This is where many of us have been in the last 5-10 years.  Sadly you if your account information is stolen they now have access to all the funds in your account.  With a credit card you won’t pay the bill for 30 days and many times would have caught any fraudulent activity long before you were even billed!

The real problem here is that most banks don’t monitor accounts as heavily as the credit card companies do, so to catch the fraud you have to be diligently monitoring your accounts each day.  If you don’t catch the fraud quickly the amount you are a liable for greatly increases over time.

One thing to also note is the hassle of closing this account if fraud is found.  Your paycheck direct deposits, auto payments to the mortgage and other companies… there is so much that you have to move and change with the account that the hassle can feel unending!

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