With Christmas around the corner it is sometimes easier to stay on budget if you use cash to pay for purchases. When I mention cash I am referring to the use of debit cards, which takes the money from your bank account immediately upon a purchase being made. Debit cards are convenient but they are an easy way for identity theft. Debit cards do not have the same protection as credit cards.
Recently my debit card was compromised. While the thief only got away with charging a $9.00 US item, it could have been worse for me. What I discovered was that I didn’t even have to use my card to have someone scan and get my number right from my purse. The small purchase was done as a test before the intention of a much larger purchase. Because the purchase was done online a PIN was not necessary. Luckily for me the Bank sent a quick text to advise of a potential breach. What happens if you don’t have a cell phone or don’t check emails on a regular basis? Thousands of dollars could disappear from your bank account. You could have a lengthy and difficult time trying to get your money back.
When you use a credit card for all your purchases, you are not only protected by the credit card company, you get to use their money until you pay off your bill at the end of the month. Your personal liability is limited if there are unauthorized charges, unlike a debit card. I have had my credit card compromised as well and the credit card company was quick to make me whole again and issue a new card.
Bottom line, be vigilant about examining your bank statements frequently. Keep your card protected inside a scan proof wallet and limit the use to reduce the chances of compromise.