Somebody steals your credit card and goes on a spree? Call your bank, dispute the charges, and life goes on.
Somebody steals your debit card? Good luck, money is gone from your bank account, and BTW, your mortgage and auto payments just bounced, so we're going to tack on some overdraft fees too. Have a nice day.
I had $4000 stolen from my bank account via a compromised debit card. The charges were reversed the same day. The bank is still liable for fraudulent transactions if you didn't authorize them.
With credit it's he bank. Fine show my account balance 4k high, I refuse to pay my bill.
Same thing with debit and it's my cash missing, and I need to go through a dance to get my own cash back.
In fact just had a CC stolen last week. No harm to me because I wasn't holding the burden.
I refuse to use my debit card for anything but at an ATM.
They also had this insecure-dy-default behavior allowing checking account overdraws to start pulling out of savings. It's worth checking that setting, too.
As a family, we set up an extra account at Schwab to write checks and do automatic payments against. There wasn't any additional cost to us - having some money sitting in the account is hardly worth worrying about with what Schwab (or anyone else) pays in interest.
The big benefit to me is that the account doesn't have over-draft protections. I have to manually move money into the account from a different account where paychecks, etc. go into. That account can't write checks, etc.
If our account is compromised, well, we lose (temporarily, I hope) what's in there but not the cash that accumulates to pay for property taxes, etc.
Overdraw protection is tricky. For example Ally offers it for free for me. If I really did accidentally overdraw my checking, I would want it sucked from my savings. However if someone stole my Ally debit, I would not want both my checking AND savings drained...
So worst case you are without a small amount of money during any dispute/fraud resolution period, but your major regular ACH payments are not at risk.
The downside is having to monitor your balances closely and transfer funds more often (which can sometimes involve a fee but if you shop around you can find banks that don't change a fee for inter-account transfers).
Works well.
People can do what they want, but I'm personally very uneasy about directly exposing my bank accounts, so I use credit cards as a buffer. Moreover, I don't have a lot of faith in banks not engaging in shenanigans that I've seen them do to me before, like transaction reordering, double charging debit transactions, debiting charges immediately, while sitting on deposits for up to a week, etc.
I think ACH is probably worse than debit cards.
We had some sort of discussion here a few days ago (I forget exact topic, maybe Swift?). Someone linked to why Donald Knuth no longer sends checks to people: http://www-cs-faculty.stanford.edu/~knuth/news08.html
It's an old rant, but if anything, things have gotten worse.
We desperately need some sort of cryptographically secure means of moving money. But it can't have all the baggage of Bitcoin.
The one time a charge went through my bank reversed it that day.
a) File a police report b) Do an (offline)report and document every transaction I considered to be fraudulent c) Sent these reports to the bank, where they would go thru it (some sort of committee) and if accepted I would be refunded.
Quite-a-hassle, took several hours to do those reports...
(This is Danish/Finnish bank, Danske Bank. I'm no longer their customer)
In Canada the account holder is not liable for fraudulent transactions, whether it is credit or debit... a benefit of our highly regulated banks.