Do you use a debit card? This is the #1 way to protect against unauthorized charges


If you’re a longtime follower of money expert Clark Howard, you’ll know he’s no fan of debit cards.

He’s long called them “piece of trash fake Visas and fake MasterCards” because they are inherently inferior to other forms of payment for a couple of reasons.

First, you’ll be in a world of hurt if someone manages to steal your card or otherwise get into the checking account linked to your debit card. Under federal law, you have a quickly narrowing window of time to report the crime and get protection.

  • If you report the unauthorized transactions within two business days after your statement is mailed to you, your liability is capped at no more than $50.
  • Report the unauthorized charges between three and 60 days after your statement mails and your liability rises to $500.
  • Wait more than 60 days to report the unauthorized charges on your statement and your liability is virtually unlimited.

Second, it’s very easy to overspend with a debit card especially if you opted in for overdraft protection. Once you opt in, the bank will approve debit card charges even though they know you don’t have the money — just so they can hit you with big nonsufficient funds (NSF) fees usually of around $35 or more.

If you don’t opt in for this “protection,” the bank will simply decline your transaction. That’s what they should do anyway!

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Best way to protect against unauthorized debit charges

Maybe you still choose to use a debit card. We’re not here to judge!

If you do, you want to be sure to sign up for fraud alert notifications via text.

A reporter for The Dallas Morning News recently had his debit card declined at the grocery store with a line of customers waiting behind him.

Three attempts later, he just paid cash and left. But he was left wondering if his debit card had been compromised.


Turns out Bank of America had flagged the charges as suspect for some reason. Because he had signed up for fraud alert notifications via text, the reporter got a text message moments later listing the charges and asking him if they were legitimate debit attempts.

He was able to reply in the affirmative and then immediately got a text back saying his debit card was unlocked and available for use.

Of course it would have been nice, as the reporter noted, if he got the fraud alert while he was still standing in line fumbling for cash. But the inconvenience of having to wait a few moments was outweighed by the benefit of having near immediate peace of mind about his account.

So the morale of the story is sign up fraud alert notifications via text from your bank or credit union. You’ll find out immediately if someone is fooling around with your money.

RELATED: 6 easy ways to save more money every month without pinching pennies

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