I was recently reminded of the importance of carrying and using a credit card, as opposed to a debit
card, after attending a speaking engagement with Frank Abagnale. You
may recall that he was portrayed by Leonardo DiCaprio in the 2002 movie
Catch Me if You Can, which chronicled his early life as a
confidence man, specifically the cashing $2.5 million in fraudulent
checks before being caught by the authorities. In exchange for a
reduced prison sentence, Mr. Abagnale agreed to work with the FBI for 5
years, but after \"going straight,\" he has now been voluntarily
associated with them for over 35 years. As he was describing some of
the most ingenious scams he has seen perpetrated over the years, he too
supports my \"Credit, Not Debit\" philosophy, something few people practice, or even know about (until now).

Before
we get into the details, you need to understand a simple concept and
answer a question: If somebody is going to steal money, would you
prefer it be yours, or that of somebody else? Obviously, you chose the latter and now I am going to explain how this applies to credit cards and ATM debit cards.

Simply
put, when you use an ATM debit card, you are spending YOUR money; when
you use a credit card, you are spending THEIR money. An ATM debit card
(or a regular check for that matter) has direct access to the
funds in your checking account, whereas a credit card does not. If you
loose your ATM debit card, it gets stolen (or the numbers copied), or
it gets cloned (increasingly more popular), and it falls into the hands
of a perpetrator, they now have full direct access to ALL of the funds
in your attached checking account. Your life savings, rent money, car
payment, college tuition, grocery allowance, emergency fund, etc. -
anything and everything possibly in that account -- are all at risk and
could be completely wiped out before you finish reading this article.
Have I got your attention yet?

Used responsibly, credit cards are
a great tool and offer extensive consumer protections not available
with an ATM debit card. By using a credit card, it puts THEIR money at
risk, not YOURS. Under federal law, consumer liability for fraudulent
credit card charges is limited to $50, and most credit companies even
reduce this to -0-. About once a year, my credit number is either
compromised or I run into a dispute with a merchant -- when this
happens, I simply call my credit card company and the charge is
removed. If I had an ATM debit card, more likely than not, I would be
out these funds, or at the very least, have a time consuming fight on
my hands.

Although there are many similar stories, Mr. Abagnale
told of a scam in which a computer system was hacked and the card
numbers of thousands of consumers was stolen and used by the thieves.
Those with ATM debit cards were COMPLETELY WIPED OUT and those with
credit cards lost nothing. It\'s not to say that your ATM debit cards
have no recourse, but it will take MONTHS of fighting with your bank
and possibly pursuing legal action with no guarantee of success, during
which time you will not have access to YOUR money. In this particular
case, there were thousands of college students who could not register
for classes because their tuition funds were gone. Which one would you
rather be?

Personally, I practice what I preach. For the past 15
years, I have not carried an ATM debit card, but rather a credit card.
I use my credit card for every purchase possible and then pay the bill
in full at the end of the month to avoid finance charges. Not only does
this give me an easy reconciliation, but also the ultimate consumer
protection since it is THEIR money at risk, not mine. Whenever the bank
mails me a new ATM debit card, I cut it up immediately.