Another day, another friend with a personal financial crisis. The latest, a friend who had unauthorized activity perpetrated through illegal access to his debit card. I received this latest request for advice and assistance from a friend through FaceBook, of all places. Turns out someone obtained his debit card information, and withdrew the funds from his checking account. He was already working with the banks to get his funds returned, as well as obtain a new debit card.
My advice – loose the debit card. Don’t let them send you a new one.
Instead, have them issue you a traditional ATM card, and use the ATM card along with a traditional credit card going forward. When (and I meant to say “when” and not “if”) someone gains access in the future, the most they can do is charge things on his credit card that he will never pay. He will dispute the charges, get a new card, and otherwise have no financial loss. With the ATM card, he can gain access to funds when needed, but without the PIN, the perpetrators have nothing. Even with the PIN his exposure is the maximum an ATM will allow to be withdrawn, typically $500.
Minimize your risks to these issues which are beyond your control by eliminating your debit card. It will better protect your bank balance as well as minimize any negative impact to your credit report.