The Pros and Cons of Debit Cards

Even if you write the check while waiting in line, it willDebit cards don't have some of the legal protections
take you forever to pay by check in most stores.that credit cards have. Credit cards give you the right
They have to see your driver's license, write down allto withhold payments on an item that is defective.
of your info, circle your address and then run it throughDebit cards don't allow this, so you would have to try
the system. It isn't the store's fault. The need for all ofto get a refund or replacement item. For large
the double-checking is caused by check fraud andpurchases, you are often advised to use a credit card.
identity theft.Then simply sit down and make the payment to your
Many shoppers, myself included, have turned to debitcredit card company that same day.
cards. Debit cards aren't really like credit cards, theyDebit cards require that you report a theft of your
are an electronic check. But some banks are startingcard within two days of discovering the loss to recoup
to offer frequent flier miles, rebates and cash rewardssome of your stolen money. If you follow all guidelines,
to regular debit card users. The lines are blurring foryou will only be liable for $50. After two days, you are
some consumers.liable for $500. After 60 days, you are left holding the
When you shop with a debit card, you need to knowempty bag.
how it works and the drawbacks.Credit cards often will offer more protection than the
There are two types of debit cards: PIN cards andlaw allows. Several cards offer zero liability for
signature cards. With a PIN card, the money isunauthorized use of a debit card.
automatically deducted from your account. You mustWhile a debit card often gives you the ability to use it
use your PIN number to use the card. Sometimes youin place of a credit card, say for telephone or internet
can even get cash back from a merchant.shopping, there are times that you should use a credit
Signature cards are often called check cards. Thecard instead. Hotels, rental-car companies and even
money is deducted from your checking account withingas stations will place a hold on your account for a
usually two or three days. You don't have to enter acertain amount of money until you check out or return
PIN, you simply sign the receipt.the car. The practice ensures them that you have the
Most cards today will perform as both types of cards.money to pay the bill.
You can use it as a PIN card and receive money backIf you use a card with the available credit, you probably
or as a signature card. Both types will work in an ATMwon't have any problem. But when using a debit card,
machine. With a PIN card, the money comes out ofbe careful. The amount they place on hold is exactly
your account immediately. With a signature card, youas if it has already been spent. This could prevent you
have to keep track of your receipts, because, likefrom having checks go through or withdrawing money
checks, the money will not come out for a few days.from your account.
Debit cards are a good alternative to credit cards. YouThe best advice for using a debit card is to be
have the convenience of a card with a limitation to themeticulous about keeping your receipts and writing
money that is in your checking account. While youthem down in your register. It is so convenient, often
can't go on a spending spree, you must keep track ofwe loose track of how and where we have spent the
when you use the card. It can be quite surprising how itmoney.
all adds up.