We’ve talked about credit cards in New Credit Card Laws go into Effect August, 2009, and Your Credit Card is Canceled.
But we haven’t talked about Debit Cards. Do you use one? Do you know the danger if you do?
For example, if you use the card and don’t have enough money in your checking account to cover the charge, you can be fined up to $39 every single time you exceed your balance.
May not sound like much but, if you’re out shopping and charge 5 or more times, it adds up!
And, many banks don’t debit your account in transactional order. What I mean is, you could have $400 in your account and make several $20 purchases. Later in the day, if you charge $350, you’re over for the day. You would think that the three $20 purchases would not incur a fine, but, if the bank takes out your last charge first, you’ll pay a fee for every purchase made that day.
As you may have guessed, many banks do just that. Instead of debiting your account in the order you charged, they wait until the end of the day and debit your account beginning with the largest purchase first. Why is it worth their while to do that?
If you have a problem with a product or delivery when using a regular credit card, laws are in place to protect you and you can dispute the charge. There are no such protections with debit cards.
Overseas charges incur additional fees so, if you’re ordering on-line, be aware of where you’re order ships from.
It’s ok to use a debit card, just be aware and use them responsibly. Don’t get caught with a law you didn’t know about. Ask your bank if they debit your account in transactional order. Ask if they charge fees for overseas purchases. And, always keep enough cash in your account to cover your purchases.
Debit cards, do you use them?
Dec 3rd, 2009 / 10:12 am
LeeAnne: More news I knew nothing about. So, you can actually get a bank to treat a debit card like a credit card? In today’s economy with all the credit card issues, this could be a very smart alternative.
Dec 3rd, 2009 / 10:09 am
Really? Credit unions replace on a debit card? I didn’t know that. And my kids just got a home loan through a credit union when the bank turned them down. Hmmmm….
Dec 2nd, 2009 / 5:04 pm
Karen,
I have used a Debit Card for over 15 years and most of it online purchases. The one thing I made sure of was to get a Visa or M/C logo Debit Card. I also take advantage of my Bank’s ability to change my number for each transaction by using it as a Credit Card -vs- a Debit Card (per sec). The transaction is handled the same way, money directly out of my checking account, but I am covered by the same rules and regualtions concerning Credit Cards. My Bank is not charged a fee for me using the Debit Card, so it is a win-win situation all around. The only problem I have ever encountered was with my Actual Credit Card – some person tried to run it up, but my Bank saw the charges coming from different areas of the country and called me immediately! Fraud insurance is a Blessed thing!!!
Dec 2nd, 2009 / 5:00 pm
Well, if you with a good bank or credit union it will replace everything that has been stolen from you. Experienced it first hand a few times. But you can’t take the convenience of shopping online away. It’s like saying you should not drive, because you can get into an accident.
Dec 2nd, 2009 / 4:36 pm
Oh my gosh! Thank you for your comment and your insight!
Dec 2nd, 2009 / 4:13 pm
I would suggest never using a Debit Card for online purchases.. if it’s stolen they have access to your bank account.. learned this the hard way!! My credit card number was hacked (somehow) during an online purchase. Fortunately my Bank caught this activity and contacted me before anything was processed.. but unfortunately I was forced to wait until a New Account # was assigned and a new card was mailed to me which was a HUGE inconvenience as I use mine at the Grocery Store..etc.
I would suggest using a regular Visa or Mastercard and just pay off the balance when the bill arrives!!