When I logged into my USAA joint checking account to pay a bill, I noticed three large transactions. My first thought was that my wife had gone shopping. But she isn’t the type of person to spend more than $1,000 on three separate transactions at the same store, on the same day – in another country.
I was the victim of fraud.
What To Do if Your Debit Card is Stolen
I am very careful about how and where I use my debit and credit cards. I almost always prefer to use my credit card over my debit card because they offer better consumer protections and better cash rewards.
I usually only use my debit card for ATM withdrawals. In fact, I distinctly remember one of the last times I used it to make a purchase. It was several years ago and I received a call from the card’s fraud department as I was leaving the store (I hadn’t used the card for a purchase in a long time, and I made the purchase in another state while on vacation, so the card company’s software flagged the transaction and their department called me).
But your debit card can be stolen even if you’re careful. Thieves may, for example, plant a virus onto your computer, hack into a third-party system that stores your debit card information or they could skim your card number when you make a purchase at a restaurant. Or you could simply lose your wallet.
In my case, I’ll never know how my debit number was stolen. But, my number was most likely compromised as part of a larger data breach.
First Step: File a Fraud Report
The first step is to report the theft immediately. This will limit the damage to your account, get the ball rolling on having your money replaced in your checking account (it can take a few days), and get a replacement card sent to you.
Filling out a fraud report was easy – it took about 20-25 minutes and the customer service rep handled the entire process over the phone.
Why Credit Cards Offer Better Protections Than Debit Cards
These thieves stole more than $1,000 from my checking account. Thankfully, we had enough money in our account to cover the temporary loss.
But we were lucky. Had we not noticed it, we could have bounced checks and faced overdrafts fees and embarrassment. This shows why I primarily use credit cards, as they offer better consumer protections against fraud (read the FTC guidelines for stolen credit and debit cards for consumer responsibilities).
When your credit card number is stolen, the disputed charges should be removed from your available balance, which allows you to continue spending as you normally would.
With debit cards, however, the stolen money is immediately taken out of your account. It can also take some time before you get the funds replaced, which can create a financial nightmare.
Credit cards have other benefits, including cash back or rewards programs, and special programs such as rental car insurance, purchase protections and more.
These are some of our recommended credit cards for military members. They offer great rewards and excellent consumer protections. However, I only recommend using credit cards if you can (and will!) pay your balance in full each month.
An Inconvenience, But No Serious Harm Was Done
In the end, this is an inconvenience for me, and for USAA. But I didn’t lose any money. I got the money back in my account in a few days. I also had to cancel my ATM/Debit card, and I will get a new one in about a week or so.
Other than that, it was a half-hour of my time and the hassle of not having a debit card for a week. I didn’t have any automatic payments routed through that card, so I didn’t need to cancel or set up any new payments, which would have been a big hassle. Thankfully, I had enough money in my account. I don’t want to think about what would have happened if either of those had not been the case.
Photo credit: Don Hankins.