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Protect Yourself From Identity Theft – Use Your Debit Card

By Erik Folgate

You’re in line to pay for some gas at the local gas station, and the cashier asks you, “Will this be debit or credit”. You’re saying to yourself, “I’m paying with a Visa debit card, does it really matter?”. The answer is YES. It does really matter what you choose when they ask you for debit or credit. There are two reasons why you need to make sure to choose debit if you are using your debit card to pay for a purchase.

It protects you from identity theft. Studies have shown that you are 17 times more likely to have your identity stolen by making a credit transaction rather than a debit transaction. This is mostly due to the fact that you must type in your pin number in order to make the transaction, when a credit purchase requires a signature receipt that is kept by the store. Most stores do not display all of your credit card numbers, but I have found every once a while that you will see receipts with the full credit card numbers displayed on it. It’s shocking that those receipts still exist, but they are out there.

It saves the merchant money when you choose debit over credit. You might be saying, “What do I care if the merchant saves money or not?” Well, you better care. Because who do you think they are going to pass off that extra expense to? You! When you choose debit, the average transaction costs the merchant about 10 cents to 20 cents. When you choose credit, banks charge merchants anywhere from 75 cents to $1.25. Merchants are hoping and praying that you choose debit when you truly are using a debit card, but it doesn’t always happen. The banks are the ones that are being ridiculous about this. Some banks are actually charging you a fee to use your debit card as a freakin’ debit card! They WANT you to say “Credit” so that they make more money off of the merchant. And banks wonder why so many people think they are scum of the earth. I am all about “maximizing the profits of your shareholders”, but the way that you maximize the profits of the shareholders is by taking care of your customers, NOT taking care of your shareholders!

I was thinking if there was a way to use your credit card as a debit card. Most credit cards have a pin number attached to them now to allow you to use it in an ATM machine. But my question is, can you say debit, when you have a credit card, and then type in the pin number? If you’ve ever tried this before and it has worked, post a comment on here. I don’t know the answer to the question, so I’m asking you.

Hopefully, this opens up your eyes more to the importance of that little phrase that we are faced with every day, “Debit or Credit?” It will further protect you from identity theft AND it will help merchants keep their cost of doing business lower which ultimately allows them to keep the prices of their products lower.

Erik Folgate
Erik and his wife, Lindzee, live in Orlando, Florida with a baby boy on the way. Erik works as an account manager for a marketing company, and considers counseling friends, family and the readers of Money Crashers his personal ministry to others. Erik became passionate about personal finance and helping others make wise financial decisions after racking up over $20k in credit card and student loan debt within the first two years of college.

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Comments

  • http://dimestodollars.blogspot.com dimes

    This post doesn’t make any sense on either of its points. First of all, you’re confusing cause with effect in the first point (as in, people who commit identity theft tend to use credit transactions, which does not have anything to do with your own decision to use credit or debit). As of December 6, 2006, it is unlawful for more than the last five digits of a credit card number to be displayed on a receipt (for more details, google FACTA). If you see one, report them.
    Also, using debit might save the merchant money, but it costs the bank money, and guess who the bank will pass the charges on to? Some banks charge a standard fee for debit transactions, and some just don’t permit the capability altogether. Aside from that, by creating a debit transaction, you expose yourself to far greater dangers such as overdraft fees, and a lack of recourse if you find fault with a purchased product. Debit transactions are not protected under FCRA.

  • Eric

    I, personally, use my debit card (as a credit card) for all of my purchases. I’ve yet to have a problem.

  • Erik

    It’s not that you’ll have a problem saying “credit”, but I know that the exposure to identity theft for credit transactions is much higher than when using a debit transaction.

    Dimes, yes…you are correct that it costs more money for the banks as a debit purchase, but they charge companies MUCH more for credit transactions. Do you agree that they would much rather hit up the large companies with deep pockets for money than the consumer. They definitely aren’t shy with hitting up fees to the consumer, but they would much rather get the corporations.

    And your comment on overdrafting is silly. If you’re responsible with your money and you balance your account regularly, you’ll never have to worry about overdraft fees. I would hope that most people know whether or not they have $100 in their account before they use their debit card to purchase a $125 dollar item.

    Also, Visa debit cards carry all of the same benefits that any other Visa card does. This is a big myth about debit cards. Go onto Visa.com and read the disclosure for all of the debit cards that they issue. You are not responsible for any unlawful transactions made with your debit card just like a credit card.

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  • Elizabeth I

    I was a victim of identity theft with my debit card. There was $375 missing from my checking account. The woman was convicted and now has a felony on her record.

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