When you start spending actual cash you become aware of the spending and you tighten your belt,but not when you pay through a card.( it becomes just a number in your mind).
I have seen people divulging the PIN number to the shop assistants to effect payment.
And the Bank charges you for spending your money.
Best is to spend cash, no cards,though this may seem antediluvian.
“Most people think using your PIN number is the safest way to pay,” says Gerri Detweiler, a personal finance expert at Credit.com. “No one would think inside a reputable store someone could tamper with a debit card.”
“If they can do it there, where can’t they do it?” she asks….
Five years ago, TJ Maxx had a massive security breach: data for 45 million credit card and debit card accounts were stolen. Late last year, thieves targeted ALDI supermarkets in 11 states from Connecticut to Virginia, stealing names, card numbers and PIN codes. Debit card loss has risen from $662 million in 2005 to $788 million in 2008, according to the American Association of Bankers.
“The safest form of payment that truly exists on the planet is the credit card,” says Abagnale. “I removed 99 percent of the risk because I spend the credit card company’s money. If someone looks over my shoulder and gets my number, I have zero liability.”…
Why Debit Cards are not Safe.
No Account Access: Consumers may be unable to access bank accounts if a debit card or banking information has been compromised. Consumers may be required to wait 7 to 10 business days for a new card to arrive to begin making charges using their personal funds.
Delays: ”The bank may eventually give you your money back if you lose money with a debit card but until then you’re out of your own money,” says Ed Mierzwinski, director of Consumer Program at U.S. PIRG, a consumer advocacy group.
Hotels and Gas Stations Can Hold Your Money: ”Some gas stations continue to impose debit card blocks,” says Mierzwinski. “A few stations may charge $1 to see if your card works, but there are still some that impose blocks of up to $100 that are not removed for one to two days. This can hurt people.”
Mary Alice Belov, a small business owner, told Consumer Reports, she had to return items in her shopping cart after a $10 gas charge resulted in a $50 hold on her account.
Increasing Levels of Fraud: ”Fraud on debit cards is a big issue. It’s increasing at the ATM with the cloning of the cards using skimmers,” says Mierzwinski.
Skimmers, devices attached to the card reader that supply a criminal with debit card information, have been discovered at three banks in Savannah, Georgia, this year, according to the Savannah Morning News. Police found a skimmer at a SunTrust ATM and may have stopped the thief in his track. But they weren’t as lucky at the Georgia’s Own Credit Union, where 276 customers’ information was compromised, according to a police report filed Thursday.
Unlimited Liabilities: The electronic banking act leaves debit card holders legally responsible for anywhere from $0 to the balance of an account. The amount of consumer liability is based on when a missing debit card account is reported missing. “If you fail to report an unauthorized transfer within 60 days after your statement is mailed to you, you risk unlimited loss,” warns the FTC. “That means you could lose all the money in your account and the unused portion of your maximum line of credit established for overdrafts.”
A Lot of Hassle: ”Even if you get your money back, there’s still a real hassle factor,” says Detweiler. “The money is still out of your account and you still have bills to pay.” Consumers could wait 2 to 3 months for a credit for an unauthorized purchase.
Lack of Credit Building: ” You do nothing for your credit score by using a debit card,” says Abagnale. “You’ve been using this debit card and haven’t done a thing to establish your credit.”
You Pay Your Bank To Use Your Money: The $5 ATM fees and $9 monthly fees to maintain an account add up. “You’re spending your own money and the bank is still charging you a fee,” says Abagnale.
Thieves tampered with the retailer’s debit-card processing equipment at about 80 stores from Massachusetts to Washington, according to the chain’s corporate parent, Michaels Stores Inc.
The thefts apparently involved the use of electronic devices called skimmers that allowed crooks to record information from shoppers’ debit cards and steal their personal identification numbers, or PINs.