Tax Guru-Ker$tetter Letter
Sunday, September 02, 2001
Debit Cards Are Dangerous
Several years ago, when banks started pushing debit cards as more convenient alternatives to credit cards, I wrote about how uncomfortable the idea of having money taken directly out of my bank account made me feel. It seemed like a recipe for disaster. Even now, I cringe when I see or hear another of the endless commercials where some poor schmuck, such as Viagra pitchman Bob Dole, is forced to prove his identity in order to use a credit card, yet no identification is required to use a debit card. How this sounds appealing to anyone is beyond my capability to comprehend. I like the fact that someone using my credit card has to prove his/her identity. How convenient is it knowing that anyone who happens to get my debit card or its numbers can clean out my bank account without anyone challenging him/her?
I have also always appreciated the buffer zone credit cards provide against bogus charges. If I find an erroneous charge on my monthly credit card statement (which I do often find), I have plenty of time to contact the credit card company to dispute it and have it removed before it actually costs us any real money. We have had very good service from the credit card companies with this kind of thing.
On the other hand, if a crook uses my debit card, there will be very real money taken out of my account immediately and the chances of ever getting reimbursed for it are slim to none. Just as with dealing with IRS, one is in a much more powerful bargaining position before paying a bill. Once the money has been received, IRS and the banks become much less willing to negotiate. This story from FoxNews today proves that my fears about debit cards were valid and are causing great expense to those people who fell for the banks' sales pitch.