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Another Reason to Stop Using Your Debit Card

In yet another example of how vulnerable our personal data really is, criminals have stolen customer debit card data from 90 PIN pads at Michaels arts-and-crafts stores across 20 states. But it also raises another question: Why are we still so attached to our debit cards? Why not cash or credit, both of which offer more protection than a debit card?


If you report your lost debit card within two business days after you realize it’s missing, federal law places a $50 liability limit on debit card losses which is soaked up by the card issuer. But, if you don’t notice money is missing from your bank account within two business days, you may be liable for up to $500 and, if you don’t notice the theft of your card within 60 days, you may never be reimbursed.

Credit cards, on the other hand, limit a customer’s liability to $50 – even if a thief maxes out your credit limit. Card companies can do this because they place the responsibility on merchants to prevent fraud; if a stolen card is used, the card company simply doesn’t pay the merchant. Bad for merchants, but good for consumers. If you report the loss before it’s used, you pay nothing.

Cash, on the other hand, can get stolen and used with impunity. But there’s limited risk: All the thief can get is what’s in your wallet, and with limited exceptions, people don’t tend to carry more than they can afford to lose.

Of course, maybe that’s because they’re carrying a debit card, so who needs cash? The convenience is understandable, and consumers’ relatively new desire to minimize credit card debt is laudable. But the more we use our debit cards, the more common these kinds of thefts are likely to become. Is it worth it?


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    • bonjour je pose une question aux gens qui sont rencammet acceptes l’entrevue, est- ce que je peux faire une demande d’immigration sans assurence?merci

    • I enjoy reading your cub reporters attemps at becoming journalists.

      The stories here are nothing more that attempts to make good bad and bad good. SNL writers to be!

    • Who are you people these articles use nothing but scare tatics to get a headline…there is no story here you are simply stating the obvious.

    • Having owned several small business, I can answer the question as to why businesses do not offer discounts for the use of cash – they can’t! It would be a violation of the credit card agreement that the business has signed with the credit card companies. In other words, for my businesses to accept VISA, MC and AMEX, I have agreed with them (through the signed merchant agreement) NOT to discount my prices by the use of cash only discounts. This type of language is standard in all merchant agreements. Violations would mean that they would take away your ability to accept credit cards.

    • 5:27 pm May 13, 2011
      Wondering wrote:
      .I use debit cards only at ATM machines. However, I would pay cash if I could get a discount, since the merchant is saving 2-3%. I use credit cards because I get some of that back in miles or other, smaller, benefits. It would be much more efficient for me and maybe better for the merchant also, if I could get cash discount. What is stopping merchants from offering such a discount?

      — What has prevented this in the past was the contract the card companies forced the retailers to sign, prohibiting retailers from giving a discount for cash if they wanted to be able to accept the cards. This has changed, though, thanks to the Obama administration’s consumer finance reform act passed last year. As of July 1, 2010, card companies cannot prohibit retailers from offering cash discounts.
      I do see some results of this in my area, particularly with gas stations that have two sets of prices, one for credit cards and one for cash.
      So speak to your favorite retailer and ask why they don’t do it too. (My guess is either, they still haven’t adjusted, or it’s too inconvenient to go back to handling a lot more cash.)

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  • Pay Dirt examines the millions of consumer decisions Americans make every day: What to buy, how much to pay, whether to rave or complain. Lead written by Quentin Fottrell, the blog examines these interactions, providing readers with news, insight and tips on shopping, spending, customer service, and companies that do right – and wrong – by their customers. Send items, questions and comments to quentin.fottrell@dowjones.com or tweet @SMPayDirt.