Cash may still be king!
Cash, assuming it is real, may be a safer way to pay for you day to day expenses. My wife and I just recently had the experience of a debit card number being stolen. Not the actual card mind you, just the number.
A card that was not used online nor used in restaurants. We have no concrete information on how it happened but it happened.
What we found out from the police and others is that this is not an uncommon occurrence. Some told us stories of significantly money being taken. Our bank was good about it and replaced the funds but what if they had not?
What protections exist for holders of credit and debit cards? A federal law called the Electronic Funds Transfer Act, passed in the mid 70’s sets some parameters on the amount of money a consumer has at risk based on certain circumstances.
Credit card holders are not limited beyond $50 and in my experience the credit card companies do not hold people to that amount. I have had it happen once or twice and the charges were just removed from the statement. Debit cards however are not credit cards and timing is everything.
The critical issue in the legislation, and in online banking agreements, is notification of your financial institution. The sooner you notify your bank the better. The Federal Trade Commission website outlines the information. You will see that the longer you wait the more money can be at stake.
So what can you do to help yourself?
After our experience, we heard all sorts of risk management tactics people used to decrease the chances of another occurrence.
- Limit use of Debit Card when possible
- Link Debit Card to an account that does not hold a large balance
- Utilization of bank alert features
- Use cash
- Closely monitoring your account
- Be aware of your surroundings when using an ATM
- Set time out feature on cell phone
- Use a real passwords
- Know how to remotely wipe your phone
- Use tracking options for phone or purchase one
Cash still has its place but remember when you lose cash it is hard to replace. Insurance coverage for cash is usually very limited in dollar amount and applicable perils that cause the loss.