Prepaid debit cards are becoming more and more popular in the U.S. for the banked and unbanked alike. While these cards offer many conveniences from a budgeting and purchasing standpoint, security remains a major concern.
We talked with two card security experts to collect advice on how to use prepaid debit cards as safely as possible. First up, we spoke with Houston Frost, President and CEO at Akimo Financial, a prepaid card company. We also solicited the advice of Dr. Ken Baylor, who is currently Research Vice President at NSS Labs and former VP of Security and Anti-Fraud at Wells Fargo. Below are their tips for protecting your prepaid debit card.
1. Choose a secure PIN
“It’s a good idea to pick a PIN that only you would know,” says Frost. “We know it’s tempting to use something easy, like your birthday, your address, or even the same number four times, but these numbers can often be found inside your wallet on your ID, driver’s license, or other documents. Make sure you choose a number that cannot be guessed or found if you lose your wallet. Always keep your PIN to yourself.”
2. But use your PIN cautiously
“Always swipe and sign or choose ‘credit’ instead of ‘debit’,” suggests Frost. “There is a common misconception that entering your PIN is safer, but exactly the opposite is true. The more times you use your PIN the greater the chance that it could be stolen or captured.”
3. Use text alerts to keep on top of your account
“Many cards have text alerts that will notify you after every transaction, including purchases, loads, money transfers and withdrawals,” says Frost. “This is a great way to keep up with your card account in real time – and is especially helpful for online transactions and recurring transactions that you may not realize are being charged to your account.”
4. Be cautious with funds
“Your card is just like cash. Never put more on the card than you will need,” says Dr. Baylor. “Just like walking around with $10,000 cash in your wallet is a bad idea, so too is using a card with a very high balance.
5. Be prepared for the worst
“Store the emergency contact number to report the loss of the card,” recommends Dr. Baylor. “If lost or stolen, time is of the essence to have the funds frozen.” He recommends recording this information by photographing the card itself.
6. Notify your card company IMMEDIATELY if you notice any suspicious activity
“The best way to ensure you are fully protected from fraudulent charges is to notify your card company as soon as you recognize fraud,” says Frost.