Why You Should Never Use Your Debit Card

There's been a rash of debit card abuse in central Texas recently. The suspect — card skimmers at gas stations.

“Many debit card abuse cases have been reported after customers used the gas pumps,” police at Copperas Cove, a city approximately one hour north of Austin reported. "In most cases, the victim used a card to purchase gas, and the card was later found to be compromised, possibly by a gas pump skimmer.”

The problem certainly isn't limited to Copperas Cove. According to a Javelin Research report from last year, losses linked to both credit and debit cards cost banks, merchants and, in some cases, cardholders $16.9 billion in 2019.

Skimmers are a popular way for thieves to steal card numbers from gas pumps, ATMs and other machines that accept credit and debit cards. The skimmer is slipped into the card reader slot and once connected, it can not only steal the card number but also PINs and zip codes as they're entered. They're pretty tough to detect, and once a number and PIN is stolen it can be used to create counterfeit cards, make purchases over the phone and carry out other forms of identity theft, like setting up other accounts or loans in your name.

But skimmers aren't the only way people can steal card numbers. Online hackers frequently use "phishing" sites, fraudulent email solicitations and phony websites to grab this kind of information.

Related: Keep Your Business Fraud-Free With These 3 Steps

This is why you — nor your business — should not be using debit cards. Ever.

"Every time you use one, you put your money and your bank account at risk," former con artist and the subject of the Leonardo DiCaprio film Catch Me If You Can, Frank Abagnale wrote on CNBC.com. "I don’t own one. I never have and I never will. I don’t recommend them to anyone — not my family, not my friends, not you."

The reason why Abagnale and most IT experts I know avoid debit cards deals with cash flow. If a fraudster can compromise a debit card, that person can access your cash. He or she can drain you and your company's bank account. And then you're stuck chasing. If a criminal makes unauthorized use of your credit card, your cash is still in your account.

In either case, according to the Federal Trade Commission, your liability would be no more than $500 — and more than likely considerably less — depending on when you report the theft. But that would be little comfort to you while dealing with the headaches caused by insufficient funds and lack of working capital for your business, all while navigating your way through your bank's customer service department trying to restore your cash balances. 

"If there’s a large data breach (and you know that there will be) and a criminal does somehow get my credit card number and charges $1 million on it, I’m protected and my credit card company will cancel the card and send a new one within the next couple of days," Abagnale writes. "If the same thing happens and the criminals get my debit card information, however, I could lose the money in my bank account and have a difficult and lengthy-time recovering it."

So get rid of your personal and business debit card and use your credit card for everything else. Let the banks worry about their liabilities. You’ve got plenty of other things to worry about.