Carrying a debit card for ATM withdrawals seems risky, what else can I do?

Question

I have a debit card tied to my primary checking account with my primary bank, and I use it for ATM withdrawals. I think the insurance on this is dismal; if I lose my debit card I'm liable for my checking account sum. I'd like to improve this. Ideas I have so far are:

• Create a secondary checking account with a small sum that I only use for ATM withdrawals.
  • Problems: tricky balance between liability, and avoiding having no money or an overdraft.
• Is an ATM withdrawal from credit card possible so I only carry a credit card?
• Is it possible to have an ATM card with no debit especially at a major bank, or otherwise configure a card to only work as ATM with reasonable withdrawal limits?
• Is another insurance option possible?

Basically is there a sensible option people usually to do avoid this?

Answer 1

If your debit card has no fraud protection then you need to find a different bank, many debit cards include it.

Even with fraud protection, I don't like to keep excess money in the checking account, so I have checking and savings accounts with an online bank. I can transfer money from savings to checking instantly, 6 times per month, which allows me to keep only what is needed in the checking account. Many online banks have a better overdraft policy as well, where you simply pay a small amount of interest on the over-drawn amount, rather than a set ~$35 overdraft fee, or a $20 fee for them to automatically transfer money from your savings account.

I've heard of, but not made use of threshold-based fraud alerts or two-factor approval, which you can set up so that any purchase in excess of $N triggers the need for additional approval via your phone.