More about debit cards

Dave Ramsey is quite the champion of debit cards.  He doesn't want people using a credit card, even if they carry a zero balance, for the simple reason that most people will buy more with a credit card than they would with a debit card.  I'm pretty sure that's true of me; I'll be using cash whenever possible.  Here's what Dave has to say about debit card safety.  The print shows up small on my monitor; if it's too small for you to read, just do ctrl/+ until it's easy to read.


Think a credit card is safer to use than a debit card? Most people do. They convince themselves that credit cards carry a better track record, and you're less likely to have your money stolen from you when you use a credit card. Sadly, those people are wrong.

Credit cards carry a huge risk of allowing the user to incur debt. Debit cards force you to pay with money you already have. If you hold a debit card from a well-known name like Visa or MasterCard, it will have the same policy about unauthorized charges that credit cards have. Don't fool yourself into thinking that credit cards are the "safe" way to go. They'll only get you into trouble and force you to make payments.

Debit cards are being used at an all-time high today and are used more often than credit cards. Last year debit card use exceeded a trillion dollars. That's a lot of people using debit cards! Although we like to see the increase of debit cards versus credit cards, we still want to make sure you're being careful with your debit card.

Since a debit card is directly linked to your bank account, it's a convenient way to purchase things without incurring debt. When you use a debit card, the money is immediately withdrawn from your account, which means no interest, late fees, over-the-limit fees or annual fees—all good things to help you avoid debt. Debit cards are also great to use because they don't require you to carry cash or write a check.

Know your PIN.

When you make a purchase with your debit card, you should have the choice of running it as a debit or credit purchase. Always choose credit. Credit? Yes. This will insure that you are protected by the card company's zero-liability policy—you will not be responsible for unauthorized transactions. If you have to use your PIN, be sure to memorize your PIN and never carry it with you. Report lost cards immediately, change your PIN frequently, and use your debit card only if you must.

Check bank statements.

To insure that no one but you is using your debit card, check your bank statements online every day. It may seem tedious, but it's better than someone stealing your money. Be sure your internet connection and computer are secure before logging into your personal information. If you spot anything suspicious, call your bank immediately.

Watch your debit card.

Keep your eyes on your debit card when transactions are taking place. It should be within your sight at all times. Once the card leaves your view, anyone has access to your card information and ultimately your bank account. That's why it's always best to use cash!

Check your credit report.

Every year you can order a free credit report from each of the three nationwide consumer credit reporting companies (one per company so you really get three a year). Do it! If you think someone used your debit card, report it to the credit bureau immediately and request a copy of your credit report. Monitoring it regularly will help cut down on any illegal activities.

Be on the lookout.

The latest scam involves criminals attaching "skimmers" to card-swiping devices and gaining access to your personal information and bank account. If a card-swiper looks questionable, don't use it. Never use an unbranded ATM.

With all that being said, I will still be using a credit card online.  There is too much information out there saying you should not use debit cards for an Internet purchase.  I will only use the credit card, however, if I have the money in the bank; that way I can go online and pay it within a day or two, whenever it shows up on my account.  Of course, with many of my purchases I use Paypal, which comes directly out of my bank account.  That's ideal, because I am spending money that I actually have.  

To see why Dave doesn't want us using credit cards at all, click HERE.

debit cards and phishing

Cliff and I live between two small towns; there's a bank in each town, and we've used both at different times.  Several years ago we switched because the larger of the two banks had online services, while the smaller did not, and I was told they probably never would.  I'm a little sloppy with my bookkeeping, and it really helps me keep my affairs in order if I can check my figures with the bank periodically.  
When we switched banks, I applied for debit cards.  After a couple of embarrassing failured attempts to use them (PIN numbers not accepted while a line of folks stood impatiently waiting for us to finish our business), Cliff and I both gave up and went back to using checks.   
Because Cliff is looking at retirement in a few months, I'm trying to avoid using credit cards altogether; so I called the bank, told a lady my situation, and she ordered replacement cards for us.  Here's hoping we have better luck with them this time.  
So after talking to the bank and ordering my debit cards, I did a little online research and found out there are a lot of situations where you shouldn't use a debit card because a credit card is safer.  Most of those situations are the very things for which I wanted it!  
Gasoline, for instance.  The main thing for which Cliff uses a credit card... usually the only thing, actually...  is to buy gasoline for the car and motorcycle, and diesel for the tractors.  I was really anxious to be able to stop using credit cards for this, and now I find out it isn't a good idea.  
After the big credit card bill we wracked up on our little Arkansas adventure in July, I was looking forward to using a debit card next time, paying as we go.  If we don't have the money, we don't go.  Makes perfect sense, right?  Ah, but hotels are another place one should not use a debit card because they often put a hold on more money than the cost of your stay, in case you leave damages behind.  
And then there are online purchases; because a debit card is linked directly to your bank account, it would give somebody an opportunity to hack into your money.  Ditto for restaurants, because there are too many people handling your card out of your sight.  Credit cards are advised for these situations.  
So where can I use my debit card safely?  Walmart and grocery stores, evidently.  But I pay cash from my Dave Ramsey envelopes at those places.  It's the same for pet expenses and clothing and co-pays at doctor's offices and prescriptions:  Cash from envelopes.  If you missed the above link with all this information, click HERE.    
Now that I've already ordered my debit cards, I realize I probably should do as my friend Lona does:  Use one credit card that gives rewards for purchases (air miles, cash, etc.) and pay the bill in full every month.  
Live and learn.   
Speaking of online dangers, I got an email yesterday that appeared to be from Chase, which is a credit card Cliff uses for gasoline.  In part, it said, "This message has been sent to you from Chase Bank Online because we have noticed invalid login attempts into your account, due to this we are temporarily limiting and restricting your account access until we confirm your identity."  
 Beneath that was a link I was supposed to click to "confirm my identity".  
"If your account information is not updated within 48 hours then your ability to access your account will become restricted." 
The technique is known as "phishing".  This ain't my first rodeo, so I recognized it immediately and forwarded it to Chase.  They replied to confirm my hunch that the email was fraudulent.  Beware, folks.  Don't take for granted that just because an email appears to have been sent by your bank or your credit card company, it's OK.