Places to Never Use a Debit or Credit Card to Make a Payment
What to Use Instead of Your Bank or Credit Card
Re-loadable pre-paid cards and cash are two good options since they are not linked to any personal financial information. Using cash is the best way to avoid overspending, because it makes you more aware of the financial impact that the purchase has on your budget, said Bruce McClary, spokesperson for the National Foundation for Credit Counseling, a Washington, D.C.-based non-profit organization.
You should not use your debit card anywhere other than in an ATM machine, said Steve Weisman, a Boston lawyer and a lecturer of law, taxation and financial planning at Bentley University in Waltham, Mass. You are exposed to more liability when you are using a debit card. Although laws limit your debit card liability to $50 if you report the fraudulent use to the bank within two days,that changes as you wait longer. If you don’t notice the fraud and report it to your bank after three days, your liability jumps to $500, he said.
“Your bank account will be frozen while the bank investigates the matter, thereby limiting your own access to the account,” Weisman said.
If you don’t have cash or a pre-paid card handy, a credit card is still a good choice because it may take banks many days to refund fraudulent charges or withdrawals, said Sanders.
“If an attacker successfully drained your checking account through your debit card, you could be without cash for quite some time,” he said.
Since nearly all debit cards can be used as a credit card, consumers should always use the credit card feature, Parker said. When the card is used as a debit card with the PIN being entered, you are risk for having both the card and PIN compromised.
“This could allow cyber criminals to directly withdraw cash,” he said.
With major retailers and banks such as Target, Sony, AOL, eBay, JP Morgan Chase, Home Depot, Anthem. TJ Maxx and Apple being attacked by cyber criminals and having millions of data records leaked and exposed. consumers should be more concerned about large companies, said Dave Bennett, CTO of IONU, a data security company based in Longmont, Colo.
“Hackers are going to go after the big targets, not the small fry,” he said.
–Written by Ellen Chang for MainStreet