|
|
Debit
Cards
Debit Cards are also known as check cards. Debit cards look just like credit
cards or ATM cards, but are used just like cash or a check. A debit card
is the way to “pay now”. When you use a debit card the money
is deducted directly from your checking or savings account. Debit cards
are accepted at many locations: grocery stores, retail stores, gas stations,
restaurants etc. They provide an alternative to carrying a checkbook or
cash.
Debit Card vs. Credit Card
Debit means to subtract. When you use a debit card, you are subtracting
money from your checking or savings account. You may only spend what is
in your account.
Credit is money that is available to you from a bank or other financial
institution. It is very much like a loan. You must repay this amount, plus
interest.
About Debit Cards
- It is
often easier to obtain a debit card than a credit card.
- When
using a debit card, it is not necessary to show identification at the
time of your transaction.
- When you
use a debit card, it may not be necessary to carry cash or a checkbook.
- When
traveling, a debit card may eliminate the need to obtain travelers checks
or carry large amounts of cash.
What If My Debit Card Is Lost or Stolen?
Just like a credit card, a debit card may be lost, stolen, or used without
your knowledge.
As a debit cardholder, you must know the extent of your protection.
Government regulations require debit card issuers to set a maximum liability
of $50 if the debit card is reported lost or stolen within two days of discovery.
Liability increases to $500 if the lost or stolen debit card is reported
within 60 days. If you do not notify the bank within 60 days of receiving
your bank statement, you could lose everything in your checking and overdraft
accounts.
Ask your bank about the extent of your liability. Some banks offer better
protection than the government requirements. Some debit cards offer “zero
liability” in case of fraud or theft if the cardholder reports the
missing card within 2 business days of discovery.
Tips For Responsible Use of Debit Cards
- If your
card is lost or stolen, report it immediately to your financial institution.
- If you
suspect your card is being used fraudulently, report this to your financial
institution immediately.
- Hold onto
your receipts from your debit card transactions. A thief may get your
name and debit card number from a receipt and order goods by mail or
phone.
- If you
have a PIN number, memorize it. Do not keep your PIN number with your
card. Don’t choose a PIN number that a smart thief could figure
out (i.e., your phone number, date of birth).
- Never
give your PIN number to anyone.
- Always
know how much money you have available in your account.
- Keep
all of your receipts in one place for easy retrieval.
On-Line Debit Cards:
These are cards that work the same as an ATM card. They perform an immediate
electronic transfer of money from your bank to the merchant’s bank
account.
To access this type of account, you must punch in your personal identification
number.
Off-Line Debit Cards:
This type of debit card looks like a credit card. The merchant’s terminal
reads the card, and creates a debit against your bank account. Unlike the
on-line debit cards it does not debit your account immediately, it usually
takes approximately 2-3 days.
The choice of an On-Line or Off-Line debit card may not make any difference
to you unless:
- your financial
institution charges a transaction or monthly fee
- you prefer
the security of a PIN-required transaction
|
|
