For several years, I have enjoyed the convenience of a Visa debit card. At the end of the month, I know exactly what purchases I've made. Now, however, I understand that fraudulent purchases on a debit card are not covered. In fact, someone with access to my card and personal identification number could drain the account. Living on Social Security and the amount of money that goes through this account monthly, I am very worried, as the loss would be disastrous. Am I worried for no reason, or do you have suggestions as to what I should do to protect myself?
You didn't get the whole story.
It's true that, by law, your bank could make you liable for fraudulent purchases. But the banking industry realized what a huge impediment that would be to debit card use, so most issuers limit your liability to $50 or less.
Visa USA, in particular, says its "zero liability" policy applies to its debit cards as well as credit cards. In other words, if someone steals from your account, you will be made whole, whether the transaction occurred with your credit card or your debit card. Visa waives the $50 liability fee.
The problem is that if someone uses your debit card to drain your checking account, the money is gone for the time it will take for your claim to be investigated and your account to be reimbursed.
By contrast, if there are fraudulent charges on your credit card, you simply wouldn't pay them.
Some people use that risk as a reason not to use a debit card. Others are so sold on debit cards' convenience that they would never give them up.
As you've found, the biggest advantage of debit cards is the detailed record you get of your spending. Debit card transactions show you exactly where you spent your money and when.
It can be much harder to keep an accurate record of your purchases if all you have are check numbers on your bank statement or receipts for ATM cash withdrawals.
You also needn't worry about spending more than you can afford. Because the money comes directly from your checking account, you can't spend what you don't have. Recovering shop-aholics have found debit cards to be an invaluable tool in learning how to manage money.
If you want to continue using your debit card, you can protect yourself by treating your card as if it were cash. Keep it in your wallet or within your sight at all times. Don't give it to a waiter or anyone else who can disappear with it for a few seconds; that's all the time it takes a thief to use a pocket-size device to "skim" the information from the magnetic strip on the back.
