-Protecting Your Account
Your Card Wisely
vs. Credit Cards
DEBIT CARD Q & A:
If you own a
checking account, there is a strong likelihood that
you also have a
debit card. Do you understand how a debit card
works? Understanding the answers to the questions below
will help you use your card properly and save money!
Q: What type of card allows you make purchases
without using credit and also withdraw money from an
A: Most commonly known as a debit card. But also known
as check cards, express checking cards and enhanced ATM
Q: Debit cards offer extreme convenience. But do you
really understand how they work?
A: A debit card operates in a manner like an electronic
checkbook. As soon as you sign the sales receipt, the
money is withdrawn from your account. Debit cards offer
no pay-later option like
credit cards do.
Q: There are two types of debit cards: deferred and
direct debit cards. What is the difference between the
A: A direct debit card requires user to enter a PIN
(personal identification number). With this type of
card, purchases are directly removed from your account.
Also, most merchants accept this type of card.
On the other hand, a deferred debit card is
signature-based. There cards have a MasterCard or Visa
logo and are accepted where ever they are. Simply give
the cashier your card and sign the receipt. The sale
amount is deducted from your account within two or three days.
Q: When you use your debit card at the checkout, you
will often be asked if you want to pay with 'credit' or
'debit'. Which should you choose?
A: Either one can be used. But when you choose
debit, there is a strong likelihood that you are going
to be charged a small fee by your bank for the making
the purchase. On the contrary, when you select credit,
you will not.
Q: With the increase in identity theft crimes, which
type of debit card provides the most optimal security
against some making fraudulent charges with your money?
A: Consumer experts advise people to utilize PIN-based,
direct debit cards only. A potential
identity thief is going to need to have your
personal identification number in order to complete a
purchase. Anyone can pick up and use a
signature-based debit card. More often than not, sales
clerks don't even check to see if signatures match the
one of the card. Even so, they are not handwriting experts!
Read about Electronic Fund Transfer Act
to learn what rights you have regarding fraudulent
charges made on your account.
Q: Suppose you need money for a
financial emergency, like a car repair. What would
your best option be for making a payment?
A: Your best option is going to be a credit card. When
making large ticket purchases with a credit card, you
have the right under the
Credit Billing Act to withhold payment in the event
that you are not satisfied with the quality of purchase
or work. On the other hand, purchases made with a debit
card are the same as paying with cash or a personal
check. You are going to be trapped trying to work out
the dispute with the merchant on your own.
Q: When shopping on the Internet, should you use a
debit or credit card?
A: Using a debit card for online shopping will not necessarily
result in someone emptying your bank account, but credit card
purchases provide you with more legal protection. Make
an order with a debit card and your protection is limited
-- and only if you identify the problem fast.