Credit Card vs. Debit Card

I often hear about people who's entire banks accounts have wiped out or have lost hundreds or even thousands of dollars because someone stole their debit card number.  There are several, really scary, scams out there.  I know because my credit card number has been stolen and duplicated TWICE!   Having your credit card number stolen is a nightmare and a bit of a pain, but my life's savings weren't wiped out.  I just had an exponentially large bill or two and had to have it investigated, etc to clear the charges.

Just the other day I heard on the news that you shouldn't swipe your debit card at the gas pump.  Ummm, how are you supposed to pay?  Cash?  What's that?  I was also recently told a horrifying story that a friend of a friend was shopping at a popular retail store in the mall and when the sales girl asked her to please see her debit card again because "it didn't go through" and she needed to "swipe it again".  The sales girl actually stole this woman's debit card number and subsequently charged thousands of dollars, paid off a car loan, etc.  All of which came directly out of her checking account!  After investigating and very luckily finding out the name of an account that the sales girl had paid off, this woman looked at her receipt form the store and realized it was this same girl that stole her number and all of her money!  I have another friend who's checking account has been burgled more than once and the only stopping the fraudulent debitor is that my friend's account becomes overdrawn.  Super.  Now he has those charges to deal with as well.  Hello?!

My perplextion is not that this happens in the first place as appalling as it is, but rather, why on Earth does anyone use a debit card!?! I mean, these criminals are bold and we all know they're out there, so will someone tell me why anyone uses a debit card rather than a credit card?  Who wants to literally carry around KEY to their entire checking or savings (mine happens to be one and the same)!?  Is it the annual fee?  In my humble opinion $65 - $150 a YEAR is a small price to pay for the security of protected personal funds and a mini insurance policy.  There are also multiple benefits to using many credit cards these days such as bonus points for travel, household items, luxury items, etc.  There are also many, very inexpensive insurance policies such as Buyers Protection for items broken, stolen, lost, etc within 90 days of purchasing them or trip insurance to cover cancelled flights and lost luggage.  If you pay your bill in full each month, much like using a debit card, these fees do not even apply other than the annual fee.  The difference is, your money is sitting in your account for that month accruing interest and isn't immediately being sucked out until YOU review your bill and actually write a check or may an electronic payment.  This way you can see what Sally Sandwichhead at your local mall has actually charged to you and let your credit card company know that you're not responsible.  The girl in the story about the mall store is extremely lucky and rare that she figured out who stole from her and could press charges, but she is still battling to try and recover her money.  Now the only way for her to get her cash back is to win a judgement against this girl and then collect.  Ugh.

If you are someone who doesn't like debt (awesome, totally get it), then open a card with no annual fee and pay it off completely each month.  You will build a strong credit rating and will have an organized record off all of your spending.  Almost no one does not accept credit cards and some places insist on them such as in-flight stores, movies and dining these days.  Take it from me, I have had my credit card account stolen twice, my purse stolen right off the back of my chair in a nice restaurant, my luggage lost/stolen and never returned and more!!  Get a credit card and take back the gold embossed invitation to  your life's savings from these derelicts!!

Happy spending!!

~ Kate