Originally Posted by CoolChange
This has been a bit of a nagging concern in the back of my mind for some time, especially now that I do almost all banking, investing, etc. online.
What do you consider a fully isolated account? Unless you are only making cash deposits and withdrawals at ATM's, an account would seem to have some ties to other, presumably larger, accounts.
By fully isolated I mean our ATM travel funds are kept in a separate financial institution (USAA in this case). It does not share direct links to outside main funds and there are no other accounts at USAA that would be at risk if the ATM card is compromised. In short, only cash in the account at the time would be at risk. Transfers can not be made without authentication from one of our other institutions through a third account. I never link any card to main investment accounts such as at Schwab or Vanguard. Especially some places overseas you must be careful about ATM card usage and I do not use it except to access local currency. All other items are either cash or go on another isolated Mastercard or VISA. Of course I have lived in Africa and Eastern Europe so I am careful having seen many things happen with cards. USAA has another great feature in that you can set alerts to text you when there is a transaction over a certain dollar amount.
We carry multiple ATM cards from different places so we can afford to turn one off if needed. Also two chip&pin credit cards for everything else.