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I know it's not always practical for everyone, so I can't give it as general advice, but this kind of situation is exactly why I isolate my "real" checking acco

by archon 12y ago

I know it's not always practical for everyone, so I can't give it as general advice, but this kind of situation is exactly why I isolate my "real" checking account. My primary account (the one to which my paychecks are deposited) doesn't have a debit card, and I never use the account number. I have a different account that I use for online services like PayPal, and for recurring charges online that require a credit/debit card, which I transfer money into on demand. It's extra work for me, but it's also less risk. Unless somebody gains access to my online banking account, they're not going to be able to access my primary funds account.

bentcorner 12y ago
This is also sort of how I operate. I have one checking account that my paycheck goes into, and I pay monthly/yearly recurring bills out of this account. There is nothing online for this account, the only way money gets out is that I get my bank to send somebody a check. I set up a weekly auto-transfer to a separate account which my wife and I carry around debit cards for. This is for groceries, gas, and personal shopping stuff, including online.
- vhost- 12y ago
  Are your accounts with two separate banks? Last time I tried to open another account with a separate bank, I got denied because I opened an account within the past year.
  - bentcorner 12y ago
    It's with the same bank. I got another debit card for it but keep in stored away and never use it.
  - ars 12y ago
    Not the OP but I do the same - two accounts, one for PayPal, and my real one. It's two checking accounts in the same bank. Just call your bank and ask them to make you another account. With my bank I don't even have to call them, I can make one from the account page. By having it in the same bank I can leave the PayPal account always at 0, and transfer the money easily to the other account.
    - jacquesm 12y ago
      Make sure that second account has a flag that says it can not be overdrawn under any circumstances. Banks are not always as smart as they should be and sometimes allow an account of a customer 'in good standing' or with a credit balance on another account to be overdrawn. Especially when it is done via direct debit. This sort of thing can really bite you.
- bentcorner 12y ago
  Also, the primary reason was to help us balance our budget. I've tried software to do it, but: a) My wife isn't into tech as much as I am and has a much lower threshold for acceptable complexity b) More importantly, any software that I found had a large maintenance burden. Having her ask "do we have enough to go to dinner tonight?" requires me to have the books up-to-date almost on a daily basis. Too much work. Now, the question of how much do we have to spend for specific activities has a very simple answer: how much is in the "spending" bank account, and it's easy to prorate that over a week's time. A previous attempt at this was over a month's time frame, but that's too long of a time span. It's easy to overspend earlier in the month and fail to mentally take into account bigger things near the end of the month. I also tried being "squishy" with the amount, moving it around depending on how much we overspent for the previous week (e.g., put something on our credit card because we actually needed to). This also doesn't work out too well, because it impairs predictability, even if it balances the books better. Plus, I want to get us off the mindset of using the credit card when we overspend a week. I was, frankly, being a tightwad with the weekly amounts and loosened it up a little to give us a bit more buffer. Setting a weekly fixed amount made our money conversations easier. I'm still undoing financial damage from earlier (paying off credit card debt and building up savings for yearly bills), but this is an abstraction my wife doesn't need to worry about (she knows about it but doesn't need to deal with it). This was all tangential to protecting yourself from badness, but it was a nice side effect.
simplestyle 12y ago
For those of us who don't have this setup, suppose this kind of breach does occur and money is taken from a checking account. Is this covered by the bank somehow? Can that money be returned?
- leorocky 12y ago
  Depends on the bank, but it's definitely not protected by law the way a credit card is, at least in the US. That goes for debit cards too by the way.
  - schrodinger 12y ago
    I've had my debit card used at least half a dozen time by thieves (they must skim the magnetic information off it at gas stations or something), including a thousand dollar charge at an ATM while I was abroad. In every case Chase refunded me in full within a few days. This isn't something every bank does?
- danielweber 12y ago
  In the US, consumer level accounts are protected against unauthorized withdrawals. (The bottleneck for the crooks is finding a sucker who will change a reversible transaction into an irreversible transaction.) It might take you some time to get it back, but the bank is legally required to get it back to you. For business accounts this protection does not apply.

by archon 12y ago

bentcorner 12y ago

This is also sort of how I operate. I have one checking account that my paycheck goes into, and I pay monthly/yearly recurring bills out of this account. There is nothing online for this account, the only way money gets out is that I get my bank to send somebody a check. I set up a weekly auto-transfer to a separate account which my wife and I carry around debit cards for. This is for groceries, gas, and personal shopping stuff, including online.

vhost- 12y ago
Are your accounts with two separate banks? Last time I tried to open another account with a separate bank, I got denied because I opened an account within the past year.
- bentcorner 12y ago
  It's with the same bank. I got another debit card for it but keep in stored away and never use it.
- ars 12y ago
  Not the OP but I do the same - two accounts, one for PayPal, and my real one. It's two checking accounts in the same bank. Just call your bank and ask them to make you another account. With my bank I don't even have to call them, I can make one from the account page. By having it in the same bank I can leave the PayPal account always at 0, and transfer the money easily to the other account.
  - jacquesm 12y ago
    Make sure that second account has a flag that says it can not be overdrawn under any circumstances. Banks are not always as smart as they should be and sometimes allow an account of a customer 'in good standing' or with a credit balance on another account to be overdrawn. Especially when it is done via direct debit. This sort of thing can really bite you.
bentcorner 12y ago
Also, the primary reason was to help us balance our budget. I've tried software to do it, but: a) My wife isn't into tech as much as I am and has a much lower threshold for acceptable complexity b) More importantly, any software that I found had a large maintenance burden. Having her ask "do we have enough to go to dinner tonight?" requires me to have the books up-to-date almost on a daily basis. Too much work. Now, the question of how much do we have to spend for specific activities has a very simple answer: how much is in the "spending" bank account, and it's easy to prorate that over a week's time. A previous attempt at this was over a month's time frame, but that's too long of a time span. It's easy to overspend earlier in the month and fail to mentally take into account bigger things near the end of the month. I also tried being "squishy" with the amount, moving it around depending on how much we overspent for the previous week (e.g., put something on our credit card because we actually needed to). This also doesn't work out too well, because it impairs predictability, even if it balances the books better. Plus, I want to get us off the mindset of using the credit card when we overspend a week. I was, frankly, being a tightwad with the weekly amounts and loosened it up a little to give us a bit more buffer. Setting a weekly fixed amount made our money conversations easier. I'm still undoing financial damage from earlier (paying off credit card debt and building up savings for yearly bills), but this is an abstraction my wife doesn't need to worry about (she knows about it but doesn't need to deal with it). This was all tangential to protecting yourself from badness, but it was a nice side effect.

simplestyle 12y ago

For those of us who don't have this setup, suppose this kind of breach does occur and money is taken from a checking account. Is this covered by the bank somehow? Can that money be returned?

leorocky 12y ago
Depends on the bank, but it's definitely not protected by law the way a credit card is, at least in the US. That goes for debit cards too by the way.
- schrodinger 12y ago
  I've had my debit card used at least half a dozen time by thieves (they must skim the magnetic information off it at gas stations or something), including a thousand dollar charge at an ATM while I was abroad. In every case Chase refunded me in full within a few days. This isn't something every bank does?
danielweber 12y ago
In the US, consumer level accounts are protected against unauthorized withdrawals. (The bottleneck for the crooks is finding a sucker who will change a reversible transaction into an irreversible transaction.) It might take you some time to get it back, but the bank is legally required to get it back to you. For business accounts this protection does not apply.