Saving with credit sounds like a contradiction, and is but read on. Saving money usually requires us to stop using credit, but there is one way that using credit can save your money. We all want to save money, right? I do. Recently my wife and I were pleased to pay off all our credit cards. In our excitement to be debt free my wife was only using her debit card, no credit cards, for purchases both local and online. When I realized that she was using our debit card online, I suggested she not do that.
If your debit account is compromised and money is stolen your bank will work with you to identify the fraud and recover the loss, but the money is gone until the dispute is resolved. Small amounts may not impact your checking account much, but what about a significant loss of funds?
Well, just like I warned her (this isn’t a I told you so, but advice for others who are trying to live within their means) I got a text from my bank about a large purchase (that wasn’t mine). When I called to talk to the fraud department there were several purchases. Someone got our debit number and went on a shopping spree. Our account was emptied, but we still have bills to pay, and are responsible to make sure our account doesn’t overdraw.
If you want to save your money use a credit card for online purchases. If your account is compromised, the bank will work with you to identify the fraud and resolve the issue. The difference is that your credit limit is reduced until there is resolution, rather than funds from your checking account being depleted.
Have you had your debit card stolen from online activity? How long did it take for the dispute to be resolved?