| Forewarned is Forearmed | | | | problems with the transaction. However, I found my |
| Bank debit or ATM cards are ubiquitous. Their | | | | ATM card being rejected at the register! |
| usefulness and convenience are undeniable. If your | | | | After embarrassingly leaving my groceries in the store |
| debit card has a Visa or MasterCard logo, you can | | | | I went home and contacted my bank. It turns out that |
| use it just about anywhere you could use a credit | | | | the bank had placed a $75 hold on my account at the |
| card. Today you can use your logo debit card to | | | | time I swiped my ATM card on the lane at the gas |
| make airline and hotel reservations and at most | | | | station. The theory being that they do not know the |
| retailers. Since the funds are withdrawn from your | | | | actual dollar amount of gas that I would actually |
| account directly you don't have to worry about interest | | | | purchase at the time of the authorization, thus the hold. |
| charges and accumulating debt as with a credit card. | | | | Until the actual amount of the purchase clears the |
| However, there is a dark side to bank debit cards you | | | | account, the amount of the hold is treated as spent. |
| should be aware of. | | | | So, when I went into the market it appeared as if I only |
| Diminished Fraud Protection | | | | had $25 in my account and my $40 transaction was |
| The first danger is the limited fraud protection. Should | | | | rejected. |
| your credit card be stolen and unauthorized charges | | | | This happened a few times before I caught on to |
| made you are not liable for any amount over $50. Not | | | | what was happening. On one occasion, over a |
| only that, because it is a credit card, the fraudulent | | | | weekend, it took 3 days for the hold to clear! During |
| charges don't impact you immediately. However, if | | | | that time, the balance of my account was restricted |
| your debit card is stolen the thief could tap out your | | | | by this hold. If you find yourself potentially in this |
| bank account rendering you broke immediately. Any | | | | situation, pay for your gas inside the store where they |
| outstanding checks and unprocessed debit purchases | | | | can send the transaction through for a specific |
| then hit your account and you are charged hefty | | | | amount. That way no extra holds are placed on your |
| overdraft fees. | | | | account and all your available funds are truly available. |
| While most banks are willing to work with you and | | | | Also, it is my understanding that not all banks have this |
| may restore the stolen funds and overdraft fees it | | | | practice and, in all fairness, I don't want to portray them |
| may take a couple of weeks. In the meantime, you still | | | | all as doing so. |
| have to deal with your creditors and the damage done | | | | Extra Fees |
| to your reputation. | | | | If you only use your debit or ATM card at ATMs |
| Overdraft Fees | | | | belonging to the bank that issued your card, you are |
| I recently saw a television news account about a poor | | | | probably alright here. But be aware that some banks |
| woman charged almost $500 in overdraft charges by | | | | will charge a small usage fee to use even their own |
| her bank in one month. She did not understand that her | | | | ATMs. |
| bank had added overdraft protection to her account | | | | Use an ATM outside of your bank's network and |
| 'as a courtesy'. While she expected her debit card to | | | | watch the ATM fees accumulate! I recently changed |
| be rejected if she did not have sufficient funds in her | | | | banks because they charged $3 every time I used |
| account the bank allowed the charges to go through | | | | their card on another bank's ATM network. This was |
| overdrawing her account. Then they charged her a | | | | in addition to the $2 fee the other bank charged for |
| $35 overdraft fee for that and every other debit | | | | the convenience of using their network. I was being |
| purchase and check subsequently processed. Before | | | | charged $5 for the privilege of getting to my own |
| she knew it she had been charged almost $500 in | | | | money. Use your ATM card on a different network 20 |
| fees. | | | | times a month and you could run up $100 in extra fees. |
| Ideally, we should always know exactly how much | | | | If you fail to properly record these fees in your check |
| money is in our account at any point in time. | | | | register, you run the risk of overdraft and incurring |
| Unfortunately, we have all been in this situation to one | | | | additional overdraft fees! |
| extent or another. Check and see if your account has | | | | Merchant Mistakes |
| overdraft protection as a 'courtesy' and have it | | | | Have you ever checked your monthly statement only |
| removed if you don't want to risk potentially hefty | | | | to find duplicate transactions debiting your account? |
| overdraft fees. A little embarrassment at the register | | | | Remember those times the merchant asked to swipe |
| is a small price to pay considering the possible | | | | your card again because the first transaction didn't go |
| consequences. | | | | through? It has happened to me. If you used your |
| Bank Holds | | | | credit card for this transaction, you can dispute the |
| I fill my car with gas at several different gas stations | | | | duplicate charge and it won't affect you immediately. |
| along my commute route. I've had some interesting | | | | However, if you used your debit card it may not be so |
| experiences at some stations when I pay for my gas | | | | easy. After you substantiate the duplicate charge to |
| with my ATM card on the lane. Once my account | | | | your bank they will most likely restore the funds. |
| was down to a balance of $100. I pumped $30 in gas | | | | However, if the erroneous charge caused other |
| and went on my merry way. Later that afternoon I | | | | checks or debit purchases to overdraw your account, |
| stopped in the market to buy $40 in groceries. | | | | you still will have to deal with all the damage they've |
| Knowing that I had $70 in my account I anticipated no | | | | done just like a stolen card. |