Paying for gas with a credit card makes it easier for you to detect fraud quickly.
The FBI estimates that a criminal activity called “ATM skimming” is costing U.S. banks hundreds of millions of dollars per year. Skimming often involves using hidden cameras or placing electronic devices over the ATM’s standard card reader in order to steal information from a card’s magnetic strip. For these reasons, you should avoid shady-looking ATMs, especially if they’re secluded or aren’t officially tied to a bank.
Follow these steps from the Better Business Bureau to avoid being “skimmed” yourself:
• Cover the key pad when punching in your PIN.
• Inspect the ATM: Avoid shady ATMS and jiggle the card swiper to see if it’s been tampered with.
• Monitor your account consistently so you can spot unusual activity.
• Report fraud immediately to your bank.
In 2008, SF Gate reported that scammers drained $45,000 from customers who used their debit cards to pay for gas at an Arco station in San Jose, Calif.
For this reason, it’s safer to use a credit card during gas station trips because you’ll be charged for the exact amount you spent, making it easier to detect any fraud. Conversely when you use a debit card, your account will show a hold, which can range anywhere between $50 and $75, depending on the station, and can last for days after your visit, according to CBS Moneywatch.
Restaurants and Bars
The danger in using your debit card at restaurants and bars is that the card has to leave your sight, which compromises your data, reports Banktime.
You may think that plunking down that debit card is the easiest way to settle a check, but in a crowded dining environment, unsuspecting prying eyes (namely the waiter who’s taking your card) can pose a real threat to your bank account.
Traveling can automatically mark you as an easy target for theft and using your debit card along the way might be a big mistake.
Not only is your information recorded at some foreign hotel you’re not accustomed to, you won’t be able catch fraud as quickly as you normally would back home because the charges will take longer to appear on your statement.
Most hotels require that a card be placed on file during check-ins, but the length of the hold is determined by the hotel and can range from 20% of the total stay to $100 per day. It can also take up to two weeks upon departure for your hotel account to be settled, which could wreak havoc on your finances.
According to BNET, a consumer reported that the hotel room he paid for in cash cost $140 in overdraft fees because he placed his debit card on file during the visit. The customer was unaware his bank would make the hold amount temporarily “unavailable,” but it did and this caused his scheduled bill payments to bounce.
If a company asks for your bank card number, instead of bank details, to set up something known as recurring payments, run!
Recurring payments are different than direct debits because if there is a dispute, you have to go through the actual company, not your bank.
It’s also much more difficult to cancel your recurring payments because again, you’ll have to go through the company.
Public Wi-Fi Locations
According to Private I blog, it’s much easier for hackers to steal your information through an unsecured wireless connection so don’t even think about using an ATM card at your favorite Starbucks or Barnes & Noble.
If you must use a card, fork over the credit because that will make it less of a challenge for these crooks to steal your data.
If you must do your shopping online, follow these steps on Private I blog to secure your activity.
Internet Shopping Sites and Phone Orders
If you like shopping online, protect yourself by not using your debit card. You have no idea how the information is transferred. For example, what if the computer you’re using gets a virus or the website you’re on gets hijacked by hackers?
If any disputes were to occur, it’s a much bigger hassle trying to get it resolved if you’ve used a debit card and the amount is already deducted from your bank account. Same goes for phone orders–you never know who’s on the other end of the line.