Last week, 40 million Target shoppers, myself included, had their payment data stolen. Whether you used a credit or debit card, if you paid with anything but cash at a Target store, your data may have been stolen.
Cash Is Silly
Really, who uses cash anymore? Not me. Not many people I know. Unless you are overcoming a serious debt issue and like the envelope budgeting method, never use cash unless you absolutely have to.
Think about the downsides of cash. If you lose cash, it’s gone. No recourse. If you use cash, you don’t have good records. If you use cash, you don’t get rewards. If you use cash, you are not building credit (you don’t have to use a card to build credit, but you need to have a card in good standing).
You get the idea.
Debit Cards are a Bad Idea
Debit cards are a bit better than cash, but not much better. There are a handful of reasons why. The biggest is that your card is linked right into your bank account.
In the big card data theft at Target, people who used a debit card are at the worst risk. If someone steals your account number and uses it, the money vanishes from your bank account. This can lead to bounced checks, fees, costs, and hassles.
Being a card, you are able to get the money back, but it is a lot of work. And you don’t just get off scot-free. You may still get stuck with fees.
Credit Cards are Safest
I was one of those Target shoppers, but I am not worried at all. Even if my card is one of the 5% estimated cards that will be used, which is still 2 million cards, no problem.
Why? If it is used, the banks just take the charge off of my card and I fill out a form legally acknowledging that the transaction was fraud. That’s the entire cost to me, just a few minutes of my time.
In fact, I have had my card number stolen in the past. My card was once used in Puerto Rico at Walmart. I certainly would have rather been in Puerto Rico than where I was, and I am jealous of the free trip my card number made. However, it didn’t cost me anything.
That is just one of a handful of stories where my card info was somehow stolen and I wasn’t liable. No big deal. No cost to me.
Another important reason to use a credit card instead of a debit card or cash: rewards. I took a trip to Israel for about $70 each way. I flew to Portland for $5. Las Vegas, $5. I have not paid full price for a flight in about two years.
It wasn’t a cash back credit card that made this happen. It was a combination of several miles and points cards that made it happen. Ever since I took a trip to London, Paris, and Amsterdam for half price, I have been an enthusiastic travel hacker trying to see the world for free, or almost free.
In addition to sweet rewards and fraud protection, there are other sweet benefits of using a credit card. Depending on your card, those include a free concierge service, price protection, extended warranties, lost luggage protection, other travel protection, rental car insurance, and a whole lot more.
Be sure to read through your card benefits to make sure you are not leaving anything on the table.
How Do You Pay?
What do you use to pay for purchases? Why? Did this post make you think twice? Please share in the comments.
Image by Nicholas Eckhart / flickr