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Protecting Debit and Credit Cards

Protecting Debit and Credit Cards

We rely on plastic to make purchases. Use it wisely and safely.

By Gary Foreman

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According to a recent poll on, three quarters of consumers say that credit card fraud is a major or moderate concern. And they have good reason to be concerned. The Federal Trade Commission estimates there are $3 billion in fraudulent charges each year.

Visa and MasterCard estimate that we spend nearly $2 trillion dollars using their cards each year. And, that doesn't include the money we spend using other cards such as Discover, American Express, department store cards and gas cards.

The Dangers
How can you protect yourself from credit or debit card fraud? It’s fairly easy when the card is out of your sight for a server or cashier to write down the card number and the verification code on the back. Later they can use the numbers to make purchases where a physical credit card isn't required.

The advantage to using a debit card instead of a credit card is that the crook can only spend what is in the account and so one way to protect yourself is to keep less in the account. Of course, keeping a low balance means adding money to the account every time you intend to use it.

A credit card can be used up to its credit limit.

There are things you can do to protect yourselves but the most effective tools are also the ones that are most inconvenient.   

Protective Measures
If you want to maintain a low balance in your debit card account, look into using online banking to transfer money. You will need to know whether the transferred money is available immediately or if you have to wait overnight.

There are a couple of other ways to make using credit or debit cards safer. One of the most effective is to not let the card out of your sight. That way if someone is going to try to steal your credit card number, they'll have to do it while you're watching them. Chances are they'll choose someone else who is an easier target to rob.

Use a PIN number and keep your PIN number separate from your card.

One way to make sure no one steals your card number is to use cash. You do run the risk of losing it or being mugged, but the good news is that you can't lose more than you have in your pocket or purse.

There is however one additional risk for cash. Getting cash from an ATM is not completely safe. Some smart criminals put recording devices onto ATMs. They record your account and PIN number for later use. The safest way to get cash is to visit the bank during normal business hours and deal with an old-fashioned, real live teller.

Gary Foreman is a former financial planner who currently edits Dollar website and newsletters.

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