Combination ATM/Credit Cards

I recently wanted to use a Wells Fargo debit card but I forgot my PIN (I actually never set it up yet- this was a new account). Curious, I took a chance and selected the ‘CREDIT’ option on the machine. Imagine my surprise when the charge went through successfully! But it bothered me that I wasn’t quite sure what occurred during this transaction. What credit account was this?

An interesting thing happens when using a debit card as a credit card. The money gets charged to an intermediate credit line, then within hours, or a day at most, the money is automatically deducted from the bank account. As a customer, I never see or have access to the credit line- I just see the money deducted. Now, call me a stickler for security, but doesn’t this give thieves direct access to my bank account?

To back up for a second, I’ll explain why credit cards tend to be very safe. We use them to rack up a bunch of charges then, at the end of the month, we get an itemized list of every expense and then (and only then) we choose to actually pay the debt. If you can manage it you should pay in full, avoid all interest, and use the card as a means of making transactions more convenient.

So what if a thief steals your wallet and spends YOUR credit line? It’s very simple. You contest the charge, it gets removed or suspended, and you never lose a penny. It’s all rather mundane these days and the credit companies are very good at dealing with it. So what happens if a thief steals your debit card and charges money out of your account? Well, when you notice, you are already out the money, and I have a suspicion (although I haven’t been through this) that it would be much more of a hassle to get your money back at that point. Not impossible, I’m sure, but it is YOUR money that’s gone, and YOU’RE the one that needs to worry about getting it back.

Essentially, the PIN is your personal secret code that should be an extra step of security to protect your actual bank accounts and this credit line work-around is a security flaw.

So I visited my friendly Wells Fargo bank employee the other day and asked to get this credit functionality taken off my ATM card. He tried to convince me otherwise, saying that vendors "should always check ID" and "that should be enough". No thanks, vendors usually DON’T check ID, and online purchases skip that step altogether. And if I wanted to use a credit card, well, that’s what my credit cards are for. But I made a point to say that I wanted to protect my account from thieves.

"Yeah, we’ve had a lot of problems with fraud lately…"

That was the bank associate’s response. I was waiting for a "but" followed by a reassuring set of procedures the bank was adhering to in order to prevent the fraud but instead he just trailed off and sat there in silence. I then strongly reiterated my argument and he sent new cards in the mail.

So if you would like to make sure your bank account debit cards are more secure, please take a look at them. If they say ‘Visa’ or ‘MasterCard’ or whatever on the front then they are bad and allow a credit transaction. Or, perhaps, there’s a way to make sure that credit line does not auto-deduct from your bank account, but I’d rather play it safe. My new ATM card doesn’t have a credit symbol so my mind is at ease. Now I need to do the same with my B of A account.