Friday, December 27, 2013

Got cash?

If you don't, then think of this:

Chase customers who shopped at Target had their accounts limited  to $100 cash withdrawals from ATM's and $300 purchases until they went to a Chase location and got new cards issued to them.

Now, to begin with, if you use  a debit card that is linked to your main checking account for daily purchases then you are an idiot. Better to either use a secondary account for debit card purchases and transfer money into that account when needed, or better yet, use credit cards for purchases and pay the bills monthly. Ideally, you should have more than one credit card. If someone gets your credit card account number and maxes out your card, at worst you use another form of payment until the card is re-issued and your account is credited. Not so if they get your ATM card information and cleans out your checking account.....Yeah, you'll get your money back eventually (maybe), but it will take a while, and what do you purchase gas for your car and food for your family with in the meantime? What do you pay your mortgage payment (or rent) with while the system works it's way to getting you your money back?

And you should have a stash of cash available for times when you cannot access your account. At least two weeks worth of normal spending.... because, at a whim, the banks or the feds can cut your account off....Credit cards too.

Think I am kidding? Chase did it to their customers with no notice when they limited folks after the Target data breach. At a whim, they changed the rules, limiting the amount of money...money OWNED BY THEIR DEPOSITORS...that could be spent until new cards could be issued.

Now, I understand that Chase had to make a hard decision here. Their potential liability was HUGE. Someone got into Target's computers and had card numbers, magnetic stripe info, and PIN numbers....info that could allow them to duplicate cards and make "legitimate" withdrawals and purchases....money that Chase would eventually have to replace when it was proven that those were  fraudulent purchases. I don't blame them for making the decision that they did.

But what if the Feds chose to do that? Or if Chase (or YOUR) financial institution chose to cut you off entirely?

They can do that, you know. All it takes is a judge's signature...or a vindictive IRS agent. Or a bank that is in financial trouble.

Have a stash. And use credit cards rather than debit cards. Or at least use a card that isn't linked to your main checking account.

Me, I use credit cards. Easier and more convenient.  And I have a stash as part of my SHTF plan.

You should too.

2 comments:

Steve in CA said...

I have some cash set aside, not much, $300 - $400 range, for such an emergency.

Old NFO said...

Same here...