Banking online is actually safer than traditional methods of banking. There are fewer errors when you use technology, and there is less fraud—as long as you’re extremely cautious with your login credentials and passwords and never use public Wi-Fi to access personal financial accounts. In addition, every transaction can be tracked in detail.
Staying safe online calls for vigilance, because scammers come up with new ways to separate you from your money every day. Anything that looks fishy probably is; however, you can keep yourself from becoming a victim by keeping an eye out for the most common scams, such as phishing. This happens when you receive an email from what looks like your bank asking you to update your account information. You’ll be directed to a website, which will ask you for your personal information, bank account numbers, usernames, and passwords. But the site you go to is not really run by your bank, even if it looks just like your bank’s website. Your bank will never ask you for personal financial information in an email, so if you get one like this, delete it without clicking on any of the contents.
Other attacks involve stealing your information from your devices. Software programs may track your communication or keystrokes on your computer, and send that information off to a scammer. Fake outlets can steal information from your phone or tablet when you plug in to recharge. Hackers can get into your devices over public Wi-Fi. Use antivirus and firewall software on your computer, and keep other software (browsers, operating system, etc.) up-to-date. Make sure your phone and tablet have the latest security updates as well. Use two-step authentication whenever possible.
Finally, keep a close watch on your financial accounts (bank, investment, and retirement) and keep a tight lid on your banking information. Simply telling somebody your account number can expose you to problems, so don’t divulge your banking information over the phone or via the web unless you know whom you’re dealing with. If you suspect that somebody else is using your account, call your bank immediately.
Quicken and Mint are two popular apps that let you use online banking information to further your financial plans. Both are robust personal finance programs that allow you to download your banking transactions and help to manage your finances and budget, balance your checkbook, pay bills electronically, prepare and file your taxes, track investments, and build a financial plan for your future.
Watch Out for Electronic Spying
Beware of skimming devices posing as ATMs. They record electronically stored information from the magnetic stripe of your card or your personal identification number (PIN) as you enter it. The thieves then skim money from your bank account. Stick to bank ATMs instead of those in malls, airports, and other public places.
Overdraft protection is a checking account feature that makes sure checks, ATM withdrawals, and debit card transactions that would send your account balance below zero still get covered in full and helps you avoid overdraft fees (which can be as high as $34 per incident). It provides a safety net to protect you from accidentally overdrawing your account, but that protection comes at a price; on average, overdraft protection fees run around $12. That may sound like a good deal, but it’s not; it’s just the start of overdraft-related fees.
Some banks allow you to cover overdrafts automatically from your savings account or with a bank credit card. The most common method of covering overdrafts involves establishing a line of credit, which typically has an interest rate that can be as much as two times higher than the going rates on credit cards or loans. The cost to you could be substantial if you don’t repay it right away.
If your overdraft protection is linked to your credit card, the bank issues a cash advance to cover your overdraft and charges it to your credit card. You pay a cash advance fee of 2 to 3 percent plus the fee your bank charges for the transaction, plus whatever interest you incur before you pay the cash advance back.
Your best bet is to be your own overdraft protection. Pay close attention to the balance in your checking account, especially if you regularly use your debit card or payment apps like Zelle or Venmo that are linked to your checking account. Set up account balance alerts that let you know when you’re running low on funds. If you know you’re having trouble covering all of your expenses, revisit your budget and make some changes; that will help keep you from drowning in bank fees that you really can’t afford.
When you use an ATM that is not owned by your bank or in its network, your bank will charge you an out-of-network fee. On top of that, you may incur a surcharge from the foreign ATM provider, which gets charged in addition to fees charged by your own bank.
Here’s an example of how it works: You withdraw $20 from an ATM that doesn’t belong to your bank, and that ATM charges a $1.50 fee. Your bank then adds an out-of-network surcharge of $3.00. You’ve just paid $4.50 in service fees, 22.5 percent of your withdrawal amount, to access $20 of your own money.
You can minimize ATM fees by:
Most ATM cards also function as debit cards. Debit cards work similarly to credit cards, but the money is taken directly from the connected bank account rather than being added to your credit card bill. You can only pay with the debit card if you have enough cash in your account to cover the purchase, or you may overdraw your account or need expensive overdraft protection to kick in.
When you’re using your debit card for purchases, you may have a choice of using it as a credit card. The main difference in this situation is whether or not you’ll have to enter your PIN when you check out. If you use it as a debit card, you may be able to get additional cash back with your purchase. Don’t be confused by the Visa or Mastercard logo on your debit card; it is not a credit card. No matter which way you use this card, the money will come straight out of your bank account immediately.
Debit card fraud can be harder to recover from than credit card fraud. After all, cash gets immediately taken from your account with a debit card, meaning you’ve already lost money by the time you notice fraud. If you don’t act quickly, it may be harder to recover the full amount stolen. That’s why it’s crucial to monitor your bank accounts and make sure all the transactions are yours.
If your debit card is lost or stolen, reporting it within two business days will limit your losses to $50 by law (though some banks may refund the full amount of the fraudulent charge). Waiting longer than that can bump your potential losses up to $500. If your card isn’t missing, you have sixty days from the day your bank statement was sent or posted online to report fraudulent transactions for full protection.
How can someone use your debit card if you still have it? Thieves may attach skimmers (sort of like data recording devices) to ATMs to capture your debit card information, then use it to make purchases. Nonsecure websites, those with addresses that start with http rather than https, make it easier for unscrupulous people to steal your debit card data.
To keep your debit card as secure as possible:
Taking these steps will help keep your debit card more secure and protect your bank account from fraudulent withdrawals.