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Q&A With Visa About Debit Cards
By JLP | December 22, 2008
Note: AllFinancialMatters.com currently has an advertising relationship with Visa.
When did Visa first release its debit card? What was the genesis of the debit card?
Debit cards first appeared in the 1970’s, but they didn’t hit mainstream until 1995 with the launch of the Visa Check card. Today there are more than 800 million Visa debit cards in circulation around the world. And according to the Federal Reserve Bank, debit is the fastest growing payments type at retail, suggesting consumers are definitely gravitating toward debit.
How has the debit card evolved since then?
Debit cards have become a key tool for consumers who want to use funds from their checking account to pay for anything from gas and groceries, to electronics or merchandise over the Internet – without having to use checks or cash. The popularity of debit also has also helped cards to be accepted in places where cash was once the primary way to pay, including fast food, movie theaters, taxi cabs, corner stores, among others. And additional features like rewards make debit cards an even more compelling way to pay instead of cash and checks.
Debit has also paved the way for the emergence of prepaid cards. Not just gift cards anymore, prepaid cards are being issued for everything from consumer rebates and employee incentives, to traveler’s checks, to benefits like unemployment and child support – which were once distributed exclusively by check. Reloadable prepaid cards are also helping to bring the convenience and security protections offered with a Visa card to people without traditional banking relationships.
How could debit acceptance change in the future? Are there new places we can expect to use a debit card that traditionally only took cash or check?
The popularity of debit has really helped to expand the acceptance of cards in new places, where cash was once the primary way to pay. Consumers are using debit cards at merchants like fast food restaurants, movie theaters, bridge tolls, car washes, parking lots and dry cleaners…where even just a couple of years ago, paying with a card might not have been possible.
Can you offer consumers any tips when using a debit card?
Absolutely. Here are some important things to keep in mind when using a debit card:
• Know your current account balance. Don’t forget about checks that have not yet cleared your account.
• Record your transactions in your check register as soon as possible. Remember to include any financial institution fees that may apply. Store your receipts safely in one place in case you need them later.
• Review your statements carefully. If you suspect a mistake, call your financial institution immediately. And always follow up with a confirmation letter.
• If your card is lost or stolen, contact your financial institution immediately. This reduces your liability if fraud losses occur.
• Choose a unique PIN. Avoid obvious choices such as your address, phone number, or birth date.
• Keep your PIN private. Memorize it. Don’t write it down or write it on your card, and never tell it to anyone.
Why do debit cards have daily spending limits?
Daily spending limits vary by financial institution. You should check with your card issuer if you have questions.
Do you have debit card questions? If so, leave a comment below and I’ll see if I can get them answered.
Topics: Credit Cards, Miscellaneous | 6 Comments »
December 22nd, 2008 at 10:34 pm
There is some misinformation about whether or not debit cards are safe from fraud. Could you get Visa to clarify if debit cards have the same charge-back protections as credit cards?
December 23rd, 2008 at 11:49 am
This is the same information you can find on the Visa website – you should point out the various fees charged by visa for what is a no risk transaction for them. I have used the visa check card in the past but was charged for the convenience which is outrageous since they already take a charge from the merchant.
The bank prepaid cards (of which visa is a major player) are even worse – they charge fees upfront and per month. If you wait too long to use the gift cards there may well be nothing left in it – this has happened to several people I know. It is always safer to just give cash. At the very least, read the fine print before deciding to purchase any of these gift cards.
January 3rd, 2009 at 1:47 am
I would also add that one of the other great things about debit/credit cards is that you can very easily track expenses.
It is easy to break down where your money is going each month if you use the same card and then view the different categories of spending on the statement.
Also, it is a big help for year end accounting purposes (esp if you own a business) if you keep all expenses on one debit or credit card.
February 8th, 2009 at 11:46 pm
Good information of debit cards, they really have evolved recently. In Australia the local system Eftpos could only be used in store so Visa Debit has been great for using a debit card online, over phone and overseas etc.
March 6th, 2009 at 12:48 pm
Thanks! Now that I got to know more about internet marketing, I am now joining the great global competition. Wish me luck!
March 31st, 2009 at 4:47 am
There will always be a fee involved if you use a service from your bank. Whenever a bank provides a service that really IS free you can bet they will be singing about it from the rooftops! On a more serious note you should always still keep records of your debit card spending just in case there is ever any discrepancy.