Protecting Your Wallet from E-Crime

When I was growing up and would walk with my grandfather through the streets of Brooklyn, I was first exposed to idea of safeguarding what I had. Simple ideas like not flashing money, keeping your wallet in your front pocket rather than in the back and not wearing flashy jewelry were ideas instilled in me from the earliest days of my youth. Unfortunately, no matter where I keep my wallet today, I run the risk of someone accessing my accounts via the internet. Flash forward twenty years to a Naval Base in Sicily where a young Petty Officer is checking his balance just after payday and finding the most unpleasant of surprises. Imagine checking your balance the day your paycheck is deposited only to see "$0.00."

I went inside and learned that my account was overdrawn by $500. The thief also took the $1,000 that had been in my account prior, and now I was $1500 in the hole. I would later learn that a store clerk kept my receipt (which printed the full card number) and sold it to a friend who lived in Virginia. I was lucky in that I was able to recover all but $50 of my money. Most people aren't so lucky.

We live in a fast paced world of convenience. We can't even take the time to write a check anymore. Most stores now print the information directly on the blank check for the customer, all you have to do is sign and date. If that takes up too much of your time you can use your debit card as a credit card. That was how I found myself on the losing end of fraud.

Beware of Debit Cards

This isn't the first problem I've had with debit cards. Once, after a series of online purchases I ended up with a fraudulent charge on my account. My bank told me that there was nothing they could do and my only option was to close the checking account or else they could continue to make charges against my checking account. Since then, I have had significantly fewer problems using debit cards and often get a friendly phone call from my bank's fraud division asking for a final authorization on suspicious activity. However, unlike a credit card, debit cards are directly linked to your checking account. This means that fraudulent charges on a debit card can easily tie up your finances until (and if) you recover your money. The month of the $1,500 theft left me unable to pay my mortgage or any utilities until the next month, forcing me to take out a personal loan to cover my expenses until the money was returned to me.

Don't link savings accounts to debit cards

Whenever I open an account that has the option of a debit card I am asked if I want my savings account linked to the card as well. Savings accounts are for saving, not for spending. I never use the funds from my savings account unless I have achieved my savings goal and am ready to make a purchase or in cases of emergency. Linking the savings account to the debit card subjects you to unnecessary temptation, however, and you may not see the harm in just taking out a few extra dollars from the "rainy day" fund.

If only it were as easy as putting your wallet in your inside pocket, I suppose I never appreciated the simplicity of it all at the time.