 |
Debit Cards
"Cash debit cards are a cross between credit cards and
checking accounts. If you feel a credit card is too much
of a temptation and you don't want to mess with checks,
a cash debit card might be just the ticket."
- Ilyce R. Glink, author of
100 Questions You Should Ask About Your Personal Finances
There are two types of debit cards:
- Direct debit
Allows for an immediate transfer of money from your bank
account to the store's account where you're making a purchase,
or at the ATM machine itself. These transactions require
you to input your personal identification number (PIN).
A direct debit card allows the system to check and make
sure you have enough money in your account before it will
process the transaction.
- Deferred debit
Looks, walks, and talks like a Visa or Master Card. This
transaction can be approved immediately, but may take several
days to actually transfer the money from your account to
the vendor's. You are required to sign a receipt, which
you should hang onto and record in your centralized records.
One of the most significant issues concerning the debit card
is its confusion with the credit card. There are, in fact,
some important differences of which you should be aware:
- If you qualify to open a bank account, you can get a debit
card. Not necessarily true of a credit card.
- If you have a deferral debit card but choose to use it
as a plain debit card, make sure you have enough money in
your bank account to cover the charge since, unlike credit
cards, the transaction will take place immediately.
- You can forget about purchases on a credit card until
your statement arrives. If you do this with a debit card--and
fail to record each transaction as it happens--you'll reek
havoc on your checking account.
- If someone steals your credit card, you're liable only
up to $50 of any charges they make to your account. While
most debit card issuers have voluntarily agreed to abide
by this credit card ruling, they are not legally bound to
do so.
|
|
