Originally Posted by
sungus77
OK, let me rephrase, significantly less protection for debit cards than ************... so at least one statement was true, i.e., it is dumb to use debit cards.
From Plaindealer on Cleveland.com
Q: I know you are apprehensive about debit cards. But with a debit card, you can use it as a credit card even though it's still taken from your checking account. Is that OK? M.P., Solon
A: Let's be clear here. You never, ever have the option of using a debit card as a credit card. You may have the option of using it to be processed as a "credit transaction," meaning it's processed through the ********** or **** network.
************, by definition, are things you use to charge purchases that you will pay for later when you get the bill. Debit cards aren't that.
To your question: Debit cards that can be processed as credit transactions (because they carry a ********** or **** logo) are far, far worse than those that can be used only with a PIN.
Because of several questions like yours recently, I'll resurrect my rant on debit cards: Protection under federal law stinks with a debit card.
With a credit card, your liability with fraud or errors is limited to $50 if you notify the creditor within 60 days after the statement is mailed.
With a debit card, the $50 liability limit expires two days after the fraud, then it jumps to $500. And you're not legally protected against errors. ************ offer the protection of the federal Fair Credit Billing Act.
That means you can decline to pay for products or services that weren't received, are defective or otherwise are unacceptable. There's no such protection with a debit card.
If you pay for something with a credit card and the merchant makes a mistake (say, charging you the wrong amount), you can dispute the charge and not pay it while it's being investigated.
With a debit card, however, banks are vague about protection.
You're protected against "unauthorized use" with a debit card, but many banks say they don't consider a merchant mistake to be "unauthorized use" because you authorized the merchant to debit your checking account.
Instead, it's a "billing dispute" that you must settle directly with the merchant. So if XYZ Co. charges you $500 instead of $50, you're on your own.
If you use a debit card and fraud or a billing mistake causes checks or transactions to bounce, you will be hit with nonsufficient funds fees (often $30 or more a pop) and you will very likely have trouble getting those refunded.
Debit card transactions require more careful bookkeeping than most people are willing to do.
Debit card transactions can be rejected even if you have enough money in the account. For example, pre-authorization on a gas pump purchase might try to "hold" $75. If you want $10 in gas and have $30 in the account, you couldn't pay outside by the pump.
Debit card authorizations can lock up your money. A merchant such as a gas station, hotel or car rental company may put a hold on more money than you're spending, and that amount will be frozen for 72 hours, meaning you won't have use of your own money for at least three days.
Debit cards provide frightening access into your bank account just because the 16-digit account number exists - even if you never use the card! The number could be used fraudulently so easily.
Think of all of the cases we've had recently where consumer information has been lost or stolen from companies.
Do you want your bank account to be vulnerable to that?