Protect Banking when Travelling

When it comes to financial security there are a few basic things you can do to protect yourself and limit the inconvenience of WHEN “Not IF” you have a Debit/ATM or Credit Card compromised.

#1 Use Credit Cards for all purchases.  The protections provided with credit cards are way more and much better than ATM/Debit cards.

#2 Get rid of your ATM/Debit cards!  But if you really need one then it should NEVER be setup to your main account that has the bulk of your money.  The best method is to setup a separate account that you maintain a small (less than $1,000) balance for “daily needs”.  When you need additional money then a manual transfer of funds is needed.  Never have the two accounts linked for automatic transfers of balance replenishment.

Get yourself multiple credit cards and designate them for specific types of use. This will make your life much easier when a CC is compromised and needs to be replaced.

CC1: Use it only for monthly reoccurring charges. Entertainment Subscriptions (Netflix, Spotify, …), Utility Services, etc.  NEVER use this card for one off spot purchases and DO NOT carry the card with you.

CC2: Use for daily purchases at reputable places of businesses that you frequent. Amazon, Groceries, Fuel, Medical, Hardware, etc…

CC3: Backup card for when #2 is compromised.  Also use this card for random purchases at places you rarely visit including online purchases that are not Amazon or another large reputable company.

I also have additional cards for my businesses that are never used for personal use.  This makes my business accounting much easier as it is kept separated from personal purchases.

And finally get rewards Credit Cards that give you cash-back or points.  Even if your paying an annual fee the points/cash-back can easily pay for itself each year.

I have followed these rules for nearly 40 years and have never had a bank account compromised.  I Until this last year I have not had a Debit card for over 30 years.  I finally got one this last year when I setup an account here in Panama and I most definitely followed my own advice with #2.  If my debit card is compromised the thief might get $500 at most. (This is an “if” because I don’t use my Debit card for purchases.  I needed it for the AutoPista FastPass (Colon Highway) and some in country online payments.

Five years ago I changed my CC use to this model after multiple fraud situations where the CC had to be replaced.  The biggest pain was dealing with updating my monthly automatic payments.  Since I changed to this model my CC1 has not been compromised once whereas my other Credit Cards have been replaced multiple times.  I actually had one card replaced 4 times in a single year.  Although a pain I never lost any money and other than waiting a few days for a replacement card to arrive my life hasn’t been turned upside-down.

Remember with Debit cards the responsibility falls on you to prove fraud and your financial center will do an investigation before returning your funds. You are also not guaranteed 100% reimbursement.   Whereas with a Credit Card the responsibility is shifted to the CC company and your are not responsible for paying any fraudulent charges and it takes a simple phone call to have the charges removed.  CC companies also have better fraud monitoring systems in place because it’s “Their Money” they are protecting.  Financial Institutions have very little incentive to catch fraud as it’s not their money.  A Financial Institution’s incentive is only good customer service, which doesn’t mean much anymore.