Stop using your debit card to make purchases… now.

Don’t use your debit card online. Don’t use it at restaurants. Don’t use it in stores. And, for the love of all that’s holy on the planet, don’t use it at gas stations where they place hold charges of up to $100 on your account. Also, I would recommend not using your debit card to get cash from an ATM where virtually-invisible skimming machines can grab your card data and your PIN.

In fact, just cut the stupid thing up and throw it away. Shred it. Burn it. Debit cards are the devil incarnate.

Hackers can use invisible skimming devices to steal your debit card number and even your PIN

Hackers can use invisible skimming devices to steal your debit card number and even your PIN

What’s caused me to go into full hysteria mode? Simple: have you noticed all of the credit card data theft going on at what feels like every major retailer in America? Sony Playstation Network a few years ago? Target last November? Home Depot this July? The unemployment office in the last few weeks?

For me, I was informed by my credit card provider that, with 100% certainty, my VISA number was stolen during the Home Depot hack in July and that they were replacing my credit card with an all-new one.

The theft of my card was confirmed once and for all when a $1,420.06 charge showed up on my account today from some random online company I’d never heard of. My credit card company (Chase, in case you’re curious) easily removed the charge from my account and confirmed once and for all no additional charges would make it through the previous number. All it took was less than five minutes and a simple phone call from me letting them know what was going on.

Unauthorized Charges: Credit vs. Debit

If you notice an unauthorized charge on your credit card within 90 days of it being filed, and report it to your credit card company, you are not responsible for paying it. They will quickly (and, often, very painlessly) remove the charge from your account. In fact, even if you’ve waited beyond the 90 days, most credit card companies will only charge you a maximum $50 fee to remove the fraudulent charge.

Debit cards are a completely different story. Debit cards are typically managed by your bank. Although you are relatively protected from fraud as the bank will track down and refund fraudulent charges, any fraudulent charges that process to your account will remove the funds directly from your account IMMEDIATELY. Whereas your credit card company won’t require you to pay fraudulent charges even if your statement closes, your bank will not refund fraudulent charges until the fraud has fully investigated.

Take a second to think about that one: if someone charged $1,420.06 to my debit card, I would be out nearly all of that money until my local bank decided the charge was fraudulent and gave me the money back.

Debit cards are simply not worth it.

How do I use my credit card?

Credit cards offer additional protection and rewards, often with no annual fee

Credit cards offer additional protection and rewards, often with no annual fee

I use my credit cards like most people use their debit cards – I don’t carry a balance (EVER) and pay off my credit card at the end of each statement. If you don’t think you can discipline yourself to paying your credit card off each month, this approach might not be for you – carrying a balance leads to interest payments that can cost substantial amounts of money. If you’re comfortable with the idea of paying off your credit card each month, you might find that you like using credit cards more than you ever liked using your debit card.

I prefer using credit cards because of the added levels of protection they offer, and, in addition, I get rewards for using my credit card (between 1-3% back on certain purchases).

Also, I only apply for credit cards with no annual fee. This way, I basically get paid to buy things I was going to buy anyway, and I receive superior fraud protection without needing to carry cash or checks on me which can be easily stolen and/or lead to identity theft.

In addition, I check my credit card charges using my credit card company’s website on a daily basis. Yes, this is a bit more vigilant (read: crazier) than most people would like to be, but it’s a good idea to check your credit card transactions once or twice a week just to make sure everything’s normal, and to give you plenty of time to report fraudulent charges quickly should they occur.

Why was I using my debit card at all?

My bank offered a better interest rate if I used my debit card

My bank offered a better interest rate if I used my debit card

My bank offered a special increased interest rate on my checking account if I used my debit card 15 times each month. Given how hard it is to find a bank that offers any kind of interest rate, this didn’t seem like too terrible a requirement… until the data hacks started happening at an alarming and ever-increasing rate.

I’ve since found an online bank that offers a better interest rate than my bricks-and-mortar bank via an online savings account, and, now, I will no longer use my debit card for my checking account. At all.

Today, I called my bank to have them cancel the previous card (which was just replaced in July by them for a different data theft) and send me a new one which will go straight into my personal safe, never to be used.

My Recommendation

Sure, I might be Chicken Little at this point screaming that the sky is falling, but I think I’m jumping the gun only a little early (if at all). I think you need to prepare yourself, and doing it now instead of waiting until the data hacks are happening on a daily basis (which they might already be) is the better approach than waiting until your identity has been stolen and your bank account has been cleaned out.

So, kill your debit card. Kill it now. With fire.

Disclaimer: Fire burns. Fire hurts. If you do elect to kill your debit card with fire, please take reasonable precautions as irx, LLC and its employees/owners (i.e. Irk) will not be held responsible for any issues that might result from the improper use or handling of things that burn and hurt like fire. Seriously. Just shred them. The whole “kill it with fire” thing is just a joke. An Internet meme. Heard of those? They’re everywhere. Go waste the next few hours Googling “Internet meme.” You’ll get every inside joke you’ve never gotten before… and still think they’re lame.

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