Computers and money...with the widespread use of the Internet more and more people are using credit cards for online purchasing. Even with all the encryption and security technology out there today, identities are stolen, credit card fraud occurs and people get hurt everyday. Using debit cards is especially risky IF that debit card is tied to your primary checking account, which brings me around to the point of this article. How to set up a dedicated online E-checking/debit card account for ALL online purchasing so you run the least risk of taking a financial hit on the Internet... a concept you may want to implement.

First, you have to find a bank that offers free (and I mean free) checking. Secondly, open a DEDICATED checking account with a small amount of money (say $20.00 to $100.00) and set this account up for online banking access and order a debit card for the account. (A debit card is tied directly to a checking account, it looks like a credit card and acts like a credit card but its purchasing power is limited to the amount of money in your checking account). Thirdly, this E-checking/debit card account should be treated like a self-funded line of credit to be used STRICTLY for online transactions (dont write checks from this account-just use the debit card like a credit card). The idea being that IF your account numbers are stolen or you are a victim of an online scam, your loss is limited to the amount of money in this dedicated account. The primary benefit of this arrangement is that it keeps your online purchasing completely separate from your other accounts and limits the amount of damage you will experience if you are ripped off. The downside of this arrangement is that your purchasing power is limited to how much money you have in the E-account and you dont have the same return of goods provision with a debit card as with a credit card, so you still have to be careful. All things considered this is one of the more intelligent ways to purchase online. Of course, if you treat this E-account like a self-funded line of credit it will keep you from charging beyond your means and you can use this particular debit card for other credit like purchases like dinners out, booking hotel rooms, etc. Again, if something bad happens, your loss is limited to the amount in the account. But there are more benefits to this strategy:

1. Having a (dedicated) "E-checking account" online will allow you to setup a Pay Pal account (Pay Pal is a secure way to send and receive money online). Pay Pal is, in essence, an "electronic wallet" that has become the industry standard for transferring money between buyers and sellers online. Pay Pal set up is free, easy to do and allows you to buy and sell online securely. Another benefit to Pay Pal is it allows you to conduct merchant processing-which means you can sell online to people using Pay Pal, Master Card, Visa, American Express, Discover Card, etc to complete the transaction. It's all very cool, secure and easy to do. 2. Having a dedicated E-account will also allow you to set up an Ebay account-most everybody knows about Ebay...another reason to setup a dedicated E-checking account!

Setting up a dedicated E-account in this manner is also a good way for people who dont have credit, have gone bankrupt, have had lenders revoke or suspend credit cards, or people who are just tired of paying high-interest credit card debt to operate online. This way they still have some form of plastic to use in a world that virtually demands its use without paying the ridiculous interest rates associated with credit cards. The key is to keep just the amount of money you need in the E-account as you need it and no more (just in case) you get whacked by a crook.

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Copyright 2006
James W. Hart, IV
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