By Craig Erwin, Ph.D.
Discover Financial Services just announced that it has developed a payment system that will transfer funds directly from my checking account to pay for items I buy without the need for a credit or debit card. Is this a stroke of genius? No, it looks like it increases my risks without providing much benefit. Does it make payment faster and easier? Maybe a little. Am I excited to use this method of payment? No, because I fear that hackers may be able to drain my checking account. And if they do hack into the payment system, nothing stands between the hackers and my money. That’s what makes credit cards so attractive. They create a barrier between hackers and thieves and your money and you can quickly cancel them.
Debit cards scare me for the same reason that Discover’s new payment system does – if someone stole my debit card, they could drain everything out of my savings or checking account, perhaps tens of thousands of dollars. I’ll keep using credit cards, because, if one of my credit cards is lost or stolen, my losses are capped at $50. I think the risks outweigh the benefits for Discover’s new payment system, so I’ll keep using credit cards to limit my losses.
How do you pay for things when you shop? Do you think about the risks of paying the way you do? Do you stick to your budget or overspend? Do you have tips for spending less and paying in a safe manner? ‘
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