Are you still using debit for pay at the pump? There's a real risk that you need to know about...

I've talked in the past about problems with approvals. Maybe you're buying $20 of gas, but they get an approval for $100 or $150. So your available balance in your checking account is reduced by that amount. You run the risk of insufficient funds charges if you have a low account balance and outstanding checks. It often takes up to 3 days until the hold is released and the real charge comes through.

As an alternative, if you still insist on using debit, I've encouraged you to go inside the station and pay at the cashier before filling up.

But now there's a bigger issue...

Criminals are getting smarter and working harder

All across the country, fraud at pay at the pump has skyrocketed. That's because it's the lowest hanging fruit for criminals as a way to get your card info. When you run your debit card through a skimmer on the card reader, the criminals can make a duplicate of your card within minutes and use it anywhere in the world. You can have checks bouncing all over town while this is all happening.

With debit card, that directly hits your checking account. Then you have to fight with your bank to get your money back...if they believe you. And they have 10 business days to investigate!

Read more: 9 places you should never use a debit card

If you use a prepaid card and you're skimmed, your money is gone and who can you fight with to get it back? Nobody. But if you use a credit card, it's no big deal. Disputes are easy with the major credit card issuers. You won't be responsible for the charge and you'll most likely get a new card to use in the mail.

But a new report I saw from MarketWatch says the crooks are coming up with unprecedented levels of sophistication to steal your debit card info at pay at the pump.

While you stand there pumping gas, their skimmers send a text message to the crook with your card info. You might not even be back in your car before they are out there charging up a duplicate version of your card!

When I get a call from somebody whose debit card is compromised, they are shocked. But the risk to you is real. Gas stations are trying to stop card theft, but they won't start accepting the new chip-based cards until 2017.

So you've been warned!!!

Read more: Should you close your credit card?

 

Image of Clark Howard About the author: Clark Howard

Clark Howard is a consumer expert whose goal is to help you keep more of the money you make. His national radio show and website show you ways to put more money in your pocket, with advice you can trust. View More Articles

Show Comments 0