Re: “use a debit card as if credit”… That must mean a transaction that gets posted to your debit account later. Is that correct? That would make it an offline transaction.
The thief would also have to have stolen the physical card. Under the current system, the thief merely needs to steal the magnetic stripe data, which can be stolen in many ways, and you would not be the wiser. With the chip/pin system, the thief has to steal the pin number (easiest way is probably with a skimming keypad or something) AND steal the physical card. The moment you notice the physical card missing and report it stolen, the thief’s stealing spree is over.
This site Chip and SPIN goes into the pro’s and cons of C&P in some detail. Here is what it says about extracting the PIN:
After reading that site, I can see how insecure cards in general are, but they do seem to believe that C&P is, at least, less insecure. For the majority of us, taking a few simple precautions, will divert the thief’s attention to someone less careful.
On the question of debit/credit transactions, we have separate cards, and each have their uses:
If a credit card transaction turns out to be fraudulent, in most cases the CC issuer bears the loss - If I buy a holiday on my CC and the company goes bust, I will get my money back. However, if I draw cash from my CC, I will be paying interest from day one. Also, it is not unusual to have a surcharge added to the bill if paid by CC.
DD cards are pretty much the same as cheques. There is little or no protection from fraud, and they open up access to your entire current account. On the other hand, there is no extra cost for using them.
The generally accepted wisdom here is to use CCs for general purchases (where there is no surcharge) and to clear the account every month, thus avoiding interest payments. Debit cards are for withdrawing cash and paying some bills, like government charges, that would be more costly with a CC. When it comes to paying for a holiday, the trick is to pay the deposit with a CC (thus gaining protection) and the balance with a debit card (thus avoiding any surcharge)
The account’s life could end right after your trip, if you call and cancel the account at that time. Then you immediately open up a new account, presumably with a PINless card.
Yes - that is what I meant - a physically stolen card - and yes, it does only afford a relatively short window of likely opportunity to the thief.
As I understand it, the UK implementation of Chip and PIN is such that the conversation between the card and reader is unencrypted. it does rely on physical access to the card, which is probably why it’s not a huge, widespread problem.