“Are you against debit cards too?”
Answer: A Debit card with a Visa or Mastercard logo is the best thing since sliced bread. There are some things to know about debit cards though:
1. When you are at any register or terminal you always choose CREDIT instead of DEBIT. And always aim at NOT using your pin number for any transactions unless at your own bank’s ATM.
The reason the checkout register terminal will always present you with the “option” to use your pin number before your so called “credit” feature is because of how stores are charged for transactions. The pin # system (or POS) is a 40 year old system that when created allowed the consumer making the purchase to be charged for the transaction. The visa/debit card system is a newer system that was created to charge the merchant/business owner for the privilege of using these cards.
Why? Because contrary to popular belief, Visa nor Mastercard are CREDIT CARD COMPANIES. Both Visa & Master card are simply payment networks. Your bank is the one that issues the credit card. Visa is the owner of the PAYMENT NETWORK that allows merchants to talk to the bank and transfer the payment. So needless to say, merchants would hope these types of payments didn’t exist at all because each one costs the merchant a fee.
This is also why you’re hitting “credit” even though you’re not using a credit card. The terminal programs are out of date and still assuming that everything purchased using Visa’s payment network is a credit card. They are not and yes it pisses me off each time I have to put my finger on “credit”.
2. Fraud. If you’re choosing any option that requires you to use your pin number in a public setting, you’re increasing your risk of fraud. Fraud from both people looking AND fraudulent terminals set up to look like legit ones. On top of that we’re talking about fraud that is based on a debit card system which you ARE more likely than not liable for in a different degree as Visa’s zero liability policy for “credit” transactions. Depending on your bank, a debit card and a credit card will have the same fraud liability when it is branded Visa or MasterCard. Remember that these are only payment networks who have to entice people to use their networks by giving piece of mind with liability.
Now please don’t ever use your pin number at a gas station, folks! I don’t care if you ran out of gas and the only card you have on you is your old atm only card from a rinky dink credit union!
People who create counterfeit ATM or debit cards by stealing your PIN and other account data can simply pull cold cash from your bank account. Using a technique known as skimming, they set up equipment that captures magnetic stripe and keypad information when you input your PIN at ATM machines, gas pumps, restaurants, or retailers.
Be especially vigilant at gas stations, Litan says. “Gas pumps are notorious for skimming because they’re produced by only a couple of different manufacturers, and if someone gets the key to one from a disgruntled employee, they can insert a skimming device inside the pump where it can’t be seen,” she says.”
With the number of accounts I see on a daily basis, the number one fraudulent activity comes from gas stations where someone used their pin number. Especially in the valley, there is a group of armenian gas station skimmers who have been working with gas station employees for years.
No your zip code cant be used at atms to withdraw money. In reality you don’t want to use your pin number anywhere on earth besides your banks atm, unless its an absolute emergency.
I’d use cash as my first option and then use my spending account’s debit card (usiing my zip code) as my second go to option.
3. Which debit card are you supposed to have on you in the first place?
What we teach in BKF is to have TWO checking accounts with a debit card attached to each for daily use. This is called the Dual Account Method (D.A.M.)
The Dual Account Method is all about separating your account with the most cash in it (normally your fixed expenses/bills account) from your spending account that is subject to fraud/id theft and frivolous spending. Its about forcing your budget to work for you – which is why your bill account debit card should be left at home when out in the streets.
Your fixed expenses/bill account expenses like:
Your spending account handles items like:
>Drinks at the bar on your tab
>Dining out where the waiter/waitress takes your card in the back
The two items each person has to decide for themselves on which category they want them to go under are:
Gas stations are notorious for fraudulent card readers however it is a fixed expense that should be budgeted for and clearly isn’t going anywhere. My gas either comes from my spending account or cash. I’m disciplined with my budget though. And fyi- thats one of the only places I use cold hard cash at.
Groceries should be a fixed expense/bill however, for those of you who should be keeping your bills account debit card at home, this may be a hinderance when you’re out and decide to pick up some groceries.
**THIS IS A CREDIT CARD FREE PROGRAM. CUT THEM BITCHES UP**
4. Lastly- Costco is no mans land! This is the grey area. If you use your pin number to get Costco gas then you’re probably least likely to get fraud activity. So it technically shouldnt be a problem to use your pin number here if you choose to but please not at these smaller stations!