Its a pain in the ass but you learn everything you need to pay for and it gets rid of things you had no idea you were still paying for
Debit card compromised
- Thread starter Bipolarcy
- Start date
I was told to never use a debit card online unless absolutely necessary, I also now rarely use my debit card in stores or at gas stations. I use a CC and then just pay the CC each month etc. I also never swipe my card if at all possible only tap to pay, as it is more difficult for them to scan a tap than it is to scan a swipe, with a fake scanner overlay.
The issue is CC have a better fraud system, and they can and do chargeback etc. In most cases you will not be responsible for anything over $50 if your number is lost or stolen.
Not so with a debit card. If it is not caught in time, you are liable for anything purchased/deducted from your account.
If you have $10K in your checking account and they spend $10k on your debit card without being caught in time, you are out that $10K, with little recourse. Banks do not have to cover the losses and while they usually have some fraud protections in place, they are not nearly as good as CC companies.
If you have a $10K limit on your CC and they spend that $10K, in most cases the maximum you are liable for is $50.
So, dont use your debit card online unless absolutely necessary, and when you do at least use something like Paypal to at least add a bit more security.
Here's a high level difference between tap and swipe showing why you should always tap when available.
Why would I use one when I can use a credit card the exact same way and earn points/rewards? You are throwing money away if you use a debit card instead of a credit card. Not to mention fraud protection being significantly better.
Yeah I figure I will have enough miles on my CC next year to take my wife to Jamaica for a week free, I also try to make sure I check for bonus miles when I purchase things, it all adds up, between miles, cash back, and extra bonuses, if you are spending the money regardless, using a CC is a no brainer. And so much safer and with a whole lot less liability if the number ever gets stolen.
I had a mystery test charge pop up on my card a couple years ago, the company caught it instantly. Cancelled my card, got a new one a couple days later, and all my auto pays and other payment options automatically updated to the new number without having to do much.
I just rarely use my debit card anymore, not only is it giving away free miles and money, but it is just too risky to use most places because so many places are finding skimmers, even in places that supposedly have checks and seals to prevent them. And online, yeah you are just asking to have your money stolen if you use a debit card online.
Put it this way, if someone walking by steals your CC info, (not how it works, but I will use your example in this case) you are only liable for a maximum of $50 to the CC company, if you are using a CC.
If the same thing happens with your debit card, you are liable for any amount they are able to charge before caught. Some banks are better with security, and some are better at covering some fraud. But if push comes to shove, they do not have to cover anything, and you are liable for everything. In many cases if they dont catch it, once the money is deducted from your account you are SOL, and that money is just gone. At that point they will stop any new charges but anything already done, is gone. Meaning whatever limit on purchases you might have might be your only saving grace but if that is $500 a day, and you catch it the first day, you still are out 10x what you would be out if it was a CC. Hell they could charge up $100K on your CC and you still would only be liable for $50.
That is just the way it is, then you take the perks of using CCs, cash back, miles, a significant bump to your credit rating, (not having any CCs significantly hurts your credit number. )
If you spend $100 dollars on your debit card, you just spent $100.
If you spend $100 dollars on your CC you, spent the $100, but depending on the card etc. could get cash back, you could get miles, you could get other bonuses to use towards future purchases. Plus other discounts and perks when using your CC, in most cases.
I could literally buy a few thousand dollars worth of stuff on amazon and use nothing but miles if I chose to, hell I can use them in a ton of places if I want. But I would rather save the miles and use them on a trip.
We have taken advantage of both the credit card bonuses, and our local banks debit card program. Our debit card may become a thing of the past, as our bank was recently sold, and they may be getting chincy about it. (Used to pay 3% or better on balances, no excuse for now paying just 1.75% with today’s rates.)
Will say the bank we use in Omaha for one credit card has an excellent fraud department and great to work with. I will also say that when a merchant’s electronic pay gets a glitch, any cards are just a P.I.T.A.
Will say the bank we use in Omaha for one credit card has an excellent fraud department and great to work with. I will also say that when a merchant’s electronic pay gets a glitch, any cards are just a P.I.T.A.
That exact same thing happened to my son’s girlfriend. They even cloned the Wells Fargo number. It sounds so official. They stole $4000 but Wells Fargo refunded her a few days later. She is a college student without much support from home so this was a very hard few days. Felt terrible for her.
A great thing to happen to me about 10 years ago was my side hustle 'reconstructing' positions, i.e. cutting the program, and since I was super part time, I was one of the first to go, and it forced me to look at my spending and cut out a bunch and sync up my budget.
The bolded part is not true. When you have fraud on your debit card, a bank will give you a provisional or temporary credit to your account once they are notified of the fraudulent transaction. The notification has to come within 60 days of receiving your statement, but anymore it's done in real time so the timeline is hardly an issue.
While you have the provisional credit, the bank will investigate the fraudulent transaction to determine whether or not it was indeed fraud. There are instances in which someone claims fraud but it is not (shocking I know). If the transaction is determined to be fraud, the provisional credit to the account becomes final and you get a notice saying the case is closed. If anyone is really interested in the particulars - Regulation E (12 CFR Part 1005) is what covers this error resolution process.
Some other things I've read in this thread are partially accurate, but relative to where the money comes from when you do have fraud on your account - it will either come from the merchant that accepted the fraudulent transaction or the bank/credit card company that issued the card. There are a lot of fights that happen in the background between those entities. That risk of fraudulent transactions coming out of the bank's pocket to refund you money is why they put transaction limits on debit cards - to limit their liability.
All that being said, I've been in banking for 20 years and I'm a religious credit card user. I rarely, if ever, use my debit card for a lot of the reasons many people outlined in this thread. Primarily I'd rather fraudsters have access to theoretical money on a credit card instead of my actual money, regardless of who holds the liability.
Something I've wanted to ask a banking professional. If Debit Cards are significantly riskier than Credit Cards, why do so many banks push them at all for people with good to excellent credit ratings?
As I posted earlier, my financial institute gives me significant interest on balance if I use my debit card 10 times per calendar month. I understand they get their kick-back from those charges but knowing they're putting their customers at greater risk and knowing when things DO get compromised they are going to have to support those customers, why do they push it?
Unless I answered my own question: By them getting their percent from each transaction so screw the customer and his problems - the execs get the bonuses and the peons in the bank dealing with the customers get the headaches.
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Anymore it's hard to find a person who hasn't had a credit/debit card hacked or some other scam happen to them it seems.
"Anyone else had this happen with debit or credit card?" would be easier to answer if it was "Has anyone not had this happen?"
Great question and the answer is interchange income. Banks (and any other card issuer) get paid per transaction each time a card is used. The more a card is used, the more money the bank/card issuer makes on the back end. It's also how credit card companies offer cash back as they are getting paid interchange income based on card usage. For a card issuer it's a double-edged sword. You need transaction volume to drive revenue, but then the more a card is used, the more it is exposed to being compromised, which can result in losses for the card issuer.
The other reason a bank wants to tie card usage into a premium rate is they want the account you are using to be your "primary" account. Generally if you have a primary deposit relationship with a bank, you are more likely to use other bank services like loans or other deposit products.
Does that depend on the bank? Because everywhere you look, it says the bolded part as difference between debit and credit card. My bank actually told me what I wrote as well. At least in part.
Basically, they said the daily limit was to protect me, not them, because if my card is stolen, I may be liable for purchases before it is reported. But I can only go by what they told me and what the internet says, I am no banker. Now again, they say "may be liable", not "will be liable", so I guess it is only in certain situations, but that still means there is more risk with using a debit than with a CC, even if that liability is only in very limited situations.
That being said it was many years ago that they told me this so things may have changed some, even though the internet still says its true. Maybe its different from one bank to another, but if you are a banker you would know more.
But I still say it is far safer to use a CC and with the added perks its is a no brainer to use a CC more than a debit card.
Seems like I get a different notice of my data being hacked from one place or another every month. I think I have received 2 separate notices from MercyOne alone in the last year that their system has been hacked and my data stolen. ISU and many other schools just had their systems hacked and shut down a week ago.
So of course they are hacking our financial info just as often.
I have resorted to the reality that my data is all over the dark web at this point, and there appears nothing anyone can do about it.
But make sure when you go to your next hair appointment that you give them your social security number, your birth day, your DL#, your first born and your wifes maiden name.... cuz they need it for their system..... and they will for sure keep it safe in their bulletproof dollar store system.... wink wink.
The above pisses me off more than anything, why so many places need so much information saved in their systems, information that has really has nothing to do with the service. But they require it for whatever service. Its absolutely ridiculous.
The fact that nothing is ever done to shut these scammers in India and Pakistan etc down is also absolutely BS.
It does not depend on the bank. Anyone that issues a debit card is subject to Regulation E, which governs the error dispute process. If you as the customer disputes a charge that hits your account, the financial institution/debit card issuer is required to investigate it (even if they believe the charge is legitimate) and will give you a provisional/temporary credit while they investigate the claim. They could always take the provisional credit away, but not until they investigate the claim and find that it was not fraud, and not until they notify you they're taking it away.
As it relates to what you were told, there could be a variety of things going on so I can only guess. Just going off what you said I would come to one of two conclusions. The first would be the staff member that told you about your liability was not trained properly and did not have an understanding of how the process works. The other conclusion would be the bank is training their employees to tell customers they have more liability than they actually do. They would do that in hopes of customers not being reckless with their debit cards so they won't be on the hook to refund fraudulent charges or spend time and other resources investigating a million fraud claims. I would not support knowingly misleading customers about their liability, but I could see a bank/credit union/other debit card issuer trying that.
