Best Practices for using Debit Cards

Debit cards make life so much easier, and you won’t rack up debts that could take you years to pay off. A debit card is only good for payment up to the balance in your current account, or the overdraft limit set by your bank, and it saves having to carry too much cash around, which could get lost or stolen.

However, as with anything, there are risks associated with debit card use. Avoid these risks by adopting recognised best practices every time your debit card sees the light of day.

Choose your PIN with fraudsters in mind

While your Personal Identification Number (PIN) should be easy for you to remember, it should not be easy for other people to work out. PIN combinations of 1234, 0000, and 1111 may seem clever to you, but to an identity thief, they’re obvious selections. Never choose a PIN related to your date of birth or your bank account numbers – you’d be surprised how easy it is to access this information, if you know how.

The most secure PIN is a random number choice that is easy to remember. A good example of this is the original PIN generated by your bank for initial use with the debit card.

Never disclose your PIN

You may tell your best friend everything, but never tell them your PIN. If money disappears from your account and the bank suspects that other people had access to your PIN, they will not cover your losses.

Bank staff will never ask for your full PIN – only selected characters. If someone purporting to be from your bank calls or emails with a request for your PIN and other security information, refuse to provide it and notify the bank. Your PIN is the magic key to unlocking your bank account – guard it with your life.

Keep track of transactions

Back in the days before plastic, transactions were paid in cash or with a cheque drawn on your bank account. The banks obligingly provided a stub for you to record the payment amount and deduct it from your bank balance. These days, cheque books are all but obsolete, and it’s too easy to shove the payment slip in your pocket and forget all about it – until the bank contacts you and asks what you’re going to do about your overdraft.

If you know you’re not disciplined enough to keep track of your debit card spending, register for online banking and check your balance daily. It takes just a few minutes, and it could save you a fortune in interest charges and also help to maintain that all-important credit score.

Don’t trash the transaction slips and statements

Debit card transaction slips may clutter your bag or briefcase, but never dispose of them in the general garbage unless you’ve rendered them totally illegible. Feed any documents with account identifying information through a shredder before disposal, or cut into tiny pieces and place in a plastic bag with enough water to turn your debit card confetti into a pulpy mush.

If you think this is extreme, you should know that most financial information used for fraudulent purposes is obtained from your garbage containers while you’re sleeping. Don’t make it easy for the fraudsters by believing they’re too squeamish to sift through your trash.

Don’t leave a large balance in the account

If you lose your debit card and someone is able to access your account, they can empty it in no time at all. Move large balances into other accounts and resist the temptation to link accounts to make access to savings easier. If it’s easy for you, it’s also easy for the thief. Instead, set up online banking to make moving money between accounts easy, while protecting your cash from theft.

Use a credit card for big buys

Debit cards do not enjoy the same level of consumer protection as credit cards. Large purchases such as holidays, furniture and electronic equipment should be paid for with a credit card, so that problems can be sorted without costing you anything. Remember to pay off the bill in full before the due date to avoid unnecessary interest charges.

With care and observation of best practices, your debit card can be your best financial friend, but do be careful out there.