I have a confession; I used to use my debit card for the bulk of purchases I made. Even though I found using my debit card to be very convenient, I changed my shopping behaviors when I learned of the risks associated with debit cards vs. credit cards.
When you use your debit card, keep in mind that it’s a “cash” transaction and your money is taken out of your checking account. If your debit card information is stolen or skimmed by an identity thief, the fraudster has the ability to withdraw all of your money from your checking account and anything attached to it. Even if you catch the theft within a timely manner, the money is gone and you would have to initiate a fraud investigation with your baking institution which can take up to 30 days to resolve the issue. As a result, you’re inconvenienced with no funds and having no access to your banking account until the fraud investigation has been completed. Furthermore, you are also inconvenienced if you have any pending charges or checks that have been recently written.
To avoid such an inconvenience, credit cards should be the first choice when making major purchases to maximize convenience and to minimize hassle should you become the victim of identity theft. I’m not saying to completely not use your debit card, but to limit your use. However, in the case that you have no choice but to use a debit card, report any unauthorized transactions you notice immediately to your banking institution.
For your convenience, here are proactive tips you can take if your debit card has been used fraudulently:
1. Call your banking institution and speak with a representative in the fraud department to initiate a fraud investigation. Also, request the forms to dispute unauthorized transactions.
2. When applicable, supply copies of supporting documents such as an identity theft report and fax it or mail it by certified mail with return receipt.
3. Keep a file of all your correspondences and enclosures from your banking institution.
4. When you request a new debit card, it is a good idea to use a new PIN number and password. Keep in mind; it should be something not easily available.