Make it tough for thieves
Breaking news such as the massive data breach at Experian or Target now seems common. Leaving aside the victims of actual fraud, I hear constantly from people who've had to swap out every debit and credit card, or whose cards were unilaterally replaced by their bank. This causes all sorts of problems.
Sometimes, it makes you long for the days of cash. While cash is not practical for everything, there are very compelling reasons to consider it or other alternatives instead of those debit cards.
Of course, you also have to watch where you get your cash, too. Criminals are good at installing near-invisible skimmers on ATMs. These steal your card information, and then a miniature camera over the keypad steals your PIN. It's everything a thief needs to drain your account.
Avoid out of the way ATMs in isolated areas. You should hold your hand over the keypad when you enter your PIN. This blocks a camera from seeing what you're doing.
Now that you know how to safely get cash, here's where you should use it.
• Gas stations
ATMs aren't the only places criminals can install card skimmers. Last year, four men were arrested for allegedly stealing $2.1 million using skimmers at gas stations in the South. The skimmers were installed in the pumps and were even equipped with Bluetooth — which allowed the thieves to come by and extract the collected numbers and PINs wirelessly!
To keep the odds in your favor, use cash. If nothing else, use a credit card at a gas pump. It's not widely appreciated that consumer responsibility for debit-card charges are different than they are for credit cards. Credit-card charges are easier to contest, and you're only liable for up to $50 of fraudulent purchases.
With a debit card, you have to report a fraudulent purchase within a few business days for the $50 liability limit to kick in.
Restaurants, too, can be a source of trouble. Unscrupulous servers bring handheld card skimmers to work to swipe your card info. Low-tech thieves can just write down the card numbers.
To make matters worse, many restaurants use older computer systems for processing cards. These are easy for hackers to install card-swipe software, as in the Target hack.
One of the lesser noted aspects about the coming end to Microsoft's XP operating system is that many restaurants and ATMs still use the XP infrastructure.
Restaurants and gas stations make juicy targets: a steady stream of customers, some not from the area. The same goes for stores.
For small purchases, cash is the way to go. Use cash at the grocery store or while buying clothes. For larger purchases, use a credit card instead of a debit card. Again, you have less liability than you do with a debit card.
OK, you can't use cash online. But please, use a credit card, not a debit card. The fraud protections are better, and a hacker can't overdraft your bank account with a credit card. You don't need to be fighting overdraft fees on top of everything else.
You can also check with your bank to see if it offers one-time credit card numbers for online buying. Since each number only works once, it won't do a hacker any good to steal it.
Of course, one drawback to using a credit card is the interest payments if you don't pay on time.
Email Kim Komando at firstname.lastname@example.org.