Tue 30 Jan 2007
Why I Don’t Use Debit Cards with Visa/MasterCard Logo
Posted by RichSlick under Financial Safety
Thanks for visiting. This Blog and is intended for individuals with Net Annual Income of $105,000 or more. Get Rich Slow + Get Rich Quick = Get Rich Slick. If you're new here, you may want to subscribe to my RSS feed.
This article epitomizes why I don’t ever use any debit cards with Visa/MasterCard logos. Generally, when I open a new checking account, the rep is always eager to get me hooked up with a Visa or Mastercard branded Debit card and I always request a regular ATM card with pin. On rare occasions, I will use my ATM card to conduct a transaction but those events are far and few.
I could never figure out why someone would choose a debit card vs. credit card when having both available.
If someone hijacks your debit card & pin they could potentially clean out your bank accounts (checking, savings, etc). That won’t ever happen with a credit card and your liability is limited to about $50.
If someone cleans out your checking account AND you have a few checks out, you’re likely to bounce all those checks and incur huge fees both from your bank and the person/business you wrote those checks to. I know banks may limit your liability with a debit card but these days banks seem all to eager to charge you fees just like the article points out.
Additionally, credit cards give you a 20 to 30 day float for your purchases whereas debit cards take money out of your account instantly. I just don’t get it…..why do people use debit cards?
January 30th, 2007 at 2:36 pm
As the guy that gets yelled at when someone who can’t balance a checkbook gets declined for that all important hamburger, I say too bad. It’s poor planning, poor training, and plain laziness that makes people cry for mommy to protect them from their own stupidity. After reading the article, I humbly submit that some people just don’t deserve bank accounts. That way, those of us who care about sound budgeting practices and savings, won’t have to pay such high fees to mitigate yet another person complaining about paying fees for their own activity (which almost always get reversed just because the bank doesn’t want to hear it anymore).
January 31st, 2007 at 11:19 am
Hey Wil, did you even read the article? How is having your Visa or Mastercard branded ATM card lost or stolen and then having the crook empty your account via using it as a Visa or Mastercard someone’s “own stupidity”? His comments make great sense if you already have a Visa or Mastercard; the non-branded ATM card is useless to a thief unless they somehow know your ATM PIN.
January 31st, 2007 at 11:58 am
The risk/reward ratio for using a debit card is nil. I know banks are now offering programs like “keep the change” but that just isn’t worth the potential downside of having your bank accounts cleaned out by theft of your debit card.
Worse yet is the hassle arguing with your bank to get that undone. The process involves signing an affidavit, sending it to the bank and hoping some idiot doesn’t lose it, waiting for the bank to refund you your money and undo all the damage.
With a credit card, I call up the credit card company and tell them to cancel the card and reverse the charges. Bingo - one step solution.
January 31st, 2007 at 1:04 pm
These are some of the same reasons I use only credit cards for bill payment and auto-payments. A lot of people pay bills through checking account and auto-draft. I try not to leave too much money in checking accounts, and sometimes anyone can make the mistake of forgetting an automatic/recurring bill ( especially if it is for a service you pay yearly or every 6 months) and the exact date it will debit,etc. Then you have to account for biller and bank error- like being double charged, a security breach involving your account information and multiple strangers having access to your bank account,etc.
Credit cards on the other hand: I almost never have to worry about going overlimit as I can charge all of my monthly bills on a card and barely hit 10% utilization of the limit. So If there is an “accidental”, double,forgotten, or incorrect charge, it is a minor temporary inconvenience. I will dispute it, wont pay any fees, and most importantly won’t have cash taken from me and have to wait to get it back.
Credit card disputes are easy. Paying with a card, seeing every expediture broken down, and paying one bill a month is easy also.
In the past when I didn’t utilize credit I had my checking account double billed and it was a pain getting it fixed. I also once bought something that I needed with a debit card. However, the item did not work. At the time I was literally rounding up change so I could buy a can of soup or something to eat. When I returned the item to the store for a refund, it took about 7 days for the money to appear in my account. Since I was not able to exchange it at the time, I had to wait a week before I could buy one somewhere else or access my money for any other expenses.
February 1st, 2007 at 5:19 pm
I actually have read the article in question, as well as several others that are constantly put out. The simple fact of the matter is, unless you do business with a very shady instituion, your account won’t be “cleaned out”. Most institutions pay for a service that will monitor suspicious activity on your debit card and will attempt to contact you in the event it happens. If they can’t get ahold of you, they simply block the card, stopping all activity.
Any money that has been taken is very easily returned to your account. Of course, YOU have to do some of the work, but if YOU are concerned about YOUR money, getting a police report and signing a form at your local branch isn’t much of a price to pay to get your money back.
As far as having to wait to get your money back, again reputable institutions will give you “provisional credit” the same day, while they process the reversal of transactions. Once the investigation is complete, and they get your money, they remove the “provisional” aspect. The only time institutions don’t do this is when they have good reason to suspect that you are responsible for some of the loss.
Just curious, what do you do between having your credit card closed out and getting your new one? If I lose my Debit, I can get a temporary card for that time period, or worse case scenario…, I write paper checks.
Consider also, if you lose your credit card (or, have your number stolen which is way more common) and transactions happen, your credit profile can be affected. It may be temporary, or it could be a long term problem.
As far as online payments go, I suggest for people to open a separate checking account just for this reason. This way, if things go wrong for any reason, it’s easier to close an account without messing up your household banking.
Look, bottom line, if you prefer not to use a debit card because you are afraid of the technology, or because you just don’t get it, fine. I personally believe that it’s a little naive and irresponsible to continue the myths that this article spreads. Debit is much safer than checks,
February 1st, 2007 at 7:42 pm
Sign affidavits, open extra checking accounts to separate debit from bill paying, make sure you have a “reputable” bank sounds like a lot of variables and work simply to use a debit card.
What do I do if I lose my credit card? I call them up and they have one fed-ex to me the next day but I keep a couple of credit cards (one at home) for this scenario.
I’m not afraid of the technology, I think it is INFERIOR to credit cards and like I originally wrote the risk/reward ration for debit cards is out of whack.
I don’t write checks and pay almost everything with credit card.
February 2nd, 2007 at 12:32 am
Okay for you then. If your system works better for you, then absolutely don’t fix what ain’t broke.
Cheers!