Over the weekend my fiance and I joined friends at a bar to listen and dance to the DJ stylings of Rich Medina.
We sat on the rooftop under a beautiful night's sky with the wonderful backdrop of music, food and the undeniably sweet, sultry smell of cigarette smoke. (My finance had a level seven asthma attack... She lived).
Of course, we each bought a round of drinks. When I paid for the first round I had to consider which card to give one bearded bartender to pay. I've been working to be more diligent in my spending and part of that is making smart choices about when to use my credit card. Lately I've been using my debit card more, but for whatever reason I decided to give this bearded bartender my credit card.
The night went on. Rich Medina was amazing... We left, went for late night tacos and went home.
There are many who would order caution in use of credit cards. We've all heard stories of people who run up credit card debt, maxing out lines of credit left and right, only having to figure out how to climb out of debt and to repair their credit score later in life. It's also true that the average consumer spends many times more over the course of year when making purchases with plastic than when relying on cash as a primary currency.
But in this instance, the casual use of a credit card saved me hundreds of dollars.
The day after our night out, we went to the mall to shop for our upcoming wedding. There was a rather large purchase I was responsible for and when I swiped my card for the item, I was told my card was declined. The saleswoman asked, "Is there another card you'd like to try?..." Which we all know if a polite way of saying, "Your credit card was declined and I no longer believe you can afford this purchase..."
My fiance even joined in on the action whispering, "Do you have enough money to pay for this?..."
I assured them both my card was not maxed out and proceeded to call my bank.
After going through recent purchases with the credit card representative, it became apparent that my card was used twice by another person. Once for a charge of 63 cents and another for a purchase from Prada for over $600. My card and account were frozen. This was the reason for the denial of card when I tried to make my purchase at the mall.
I thought back to when my card was outside of my possession within the last few days and I immediately remembered the bearded bartender. He likely copied my card information in-between charging me for my drinks and decided to try to use it to buy some Prada shoes the next day.
This story may have gone a lot different had I handed him my debit card and not my credit card. Debit card swipes are direct debits of your actual money. When you swipe, it's as if your bank is literally taking money from your checking account and handing it to the person or business who you are buying from. Using your credit card is different. You're purchasing on credit serves as an intermediary between you and your real money. Calling my bank about my credit card allowed them to see what purchases were legitimate and which were not. They made the necessary adjustments, allowed me to swipe for the item and then cancelled the card.
The experience was amusing. I'd never had my finances "attacked" in that way and so it served as a solid reminder of why I've used my credit card so casually in the past.
Swiping debit cards gives you less protection, particularly when swiping your card at unfamiliar or technologically vulnerable establishments (Google "Target credit card hack").
Yes. Using your credit card for common purchases like Vodka sodas and shots of Tequilla requires discipline. One shouldn't carry huge balances from month to month and you can't make a habit of buying unnecessary crap because you're not immediately experiencing the debit of cash.
But what's also true is that if I'd given the bearded bartender my debit card and the charge for his Prada shoes went through, there may have been less that could be done to retrieve the money. The $600 would have been gone and I would have to return to the bar to see if the bearded bartender did indeed have a new pair of Prada shoes on his feet.
The simple fact is, money used from a stolen debit card is usually gone for good.
A word to the wise when buying drinks from bearded bartenders on rooftops.