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As if we don’t have enough to worry about these days, card fraud cases have been growing rapidly in the past year. Whenever I see it mentioned on a facebook group, there are 20-30 other people joining in with their own stories of fear and frustration.
Don’t let this happen to you. Here are some simple steps you can take to protect yourself.
Some people use their debit cards for everything, even when they have multiple thousands in their current account. This is a bad idea on several levels.
You’re going to miss out on points or cash back that you’d get from using a credit card. More importantly, you are flashing around the keys to your current account.
Frank Abignale, the real-life inspiration behind Leonardo DiCaprio’s character in Catch Me If You Can, used to be a fraudster and now he advises the FBI and banks. He says the only thing your debit card should see…
… is the ATM. Not the cafe, restaurant, garage, online shop.
You should be using a credit card instead. Why? Because the debit card can empty money straight from your bank account. In the UAE, a typical daily limit might be 45,000 AED ($12k) for purchases and 15,000 AED ($4k) for cash withdrawals. That’s a lot of damage.
It takes seconds for a waiter or attendant to skim your card details. In general, you should never let your card out of your sight. That still doesn’t mean your details are safe. Online, you have no choice but to send your card number off into the ether.
Once the money has been taken, it has gone from your account. You will be annoyed and your bank will be annoyed. It could be weeks of sleepless nights before the money returns to your account. So let’s avoid this.
Frank says, “You can have security or you can have convenience.” It’s time to choose. Here are some tips for protecting your money if you insist on using your debit card:
1) Don’t let your card out of your sight.
2) If you can’t find your card or suspect fraud, put a temporary block on the card immediately via your bank’s website or call centre.
3) Don’t save your card details on apps or websites – they get hacked all the time.
4) Do use Apple Pay or Google Pay, as they are more secure for card transactions – they don’t pass your card details to the merchant.
5) Use a debit card attached to an account with only a small amount of money in it.
The above tips apply to credit cards as well, but they offer you an extra level of protection. Money does not immediately come out of your account when you pay by credit card.
Now this can cause its own problems (spending doesn’t feel ‘real’), but it buffers you from fraud. If you and the card issuer can resolve the situation before your monthly payment is due, then you never lost any money at all. If the payment is due, insist on a temporary credit so you don’t have to pay out. You may have to fight for this, but you are in a much worse position if you’ve paid out.
Credit cards also protect you if you purchase something and it never arrives. I faced this and Amex reversed the charge immediately after a two-minute call. If I had used my debit card, I doubt I would have been able to get the money back.
Most importantly, you have to report the problem to the bank as soon as possible. If you delay or your card gets used again after you lost it and didn’t report it, the bank may be able to wriggle out of paying or delay reimbursement.
You may feel you can’t trust yourself with a credit card. Well, it’s time to start adulting.
Get started with my free guide:
3 Steps to Expat Financial Independence
15-minute read. Discover the simple process for taking control of your finances so you never have to stress about money again.
While we’re talking about fraud, always use two-factor authentication on your major email, social media, banking and brokerage accounts. As well as your username and password, you may need your phone to authenticate account access via your thumb or face.
This makes it a lot harder for people to hack into your accounts. One-Time Passwords sent to your phone by text offer some protection, but they can be intercepted or redirected.
Think twice about keeping lots of money in a bank account that doesn’t have
2FA security. It may add a few seconds of inconvenience to your life, but it protects you from a whole world of pain.
Have a think now:
– Which of your accounts are most vulnerable to attack and have the least layers of security?
– What security layers can you add, e.g. 2FA?
– Where have you left your card details lying around the web?
– What can you do to stop using your debit card for purchases?
Any other top tips, feel free to reply and let me know!
PS My podcast xFI is coming soon, check out xFI: Expat Independence on all good podcasting locations (including Spotify) and @xFIworld on ig!
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