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Things to Think About When Using a Visa Debit Card
By JLP | January 23, 2009
NOTE: AllFinancialMatters currently has an advertising relationship with Visa.
Financially, one of the most significant events that helped my wife and me to get on track occured the day we got our Visa Check Card. Previously, we had used credit cards for expenses and I stupidly allowed myself to charge more than I should have and was almost always shocked when the bill came in the following month and it was more than I could pay. Yes, it was stupid. It was really stupid considering that we were making decent money at the time.
When we got our Wells Fargo Visa Check Card everything changed. Why? Because we HAD to practice self-control in our spending since our card was tied directly to our bank account and every time we used the card, the purchase was almost immediately taken out of our checking account. There was no more room for error and there also credit card backstop. This was a good thing.
That said, there are some things to think about when using a debit card. Visa sent me the following list of debit card tips (I included my thoughts on some of the tips). Most of these you probably alread know:
• Know your current account balance. Don’t forget about checks that have not yet cleared your account. This was much harder to do in the days before online banking! Also, it’s a good idea to keep a cushion in your account just in case you make a mistake.
• 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. I NEVER do this!
• Review your statements carefully. If you suspect a mistake, call your financial institution immediately. And always follow up with a confirmation letter. This is a good idea. Remember the bank can’t do anything about it if they aren’t aware of the problem.
• If your card is lost or stolen, contact your financial institution immediately. This reduces your liability if fraud losses occur. Duh!
• 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. It’s funny that they should even have to mention this.
Finally, one tip they didn’t mention but I will add:
• If you know you are going to be purchasing something big, be sure and call your bank to see if you can get a spending limit increase. I have had problems with this in the past but a call to the bank usually cleared it up quickly.
Topics: Miscellaneous | 6 Comments »
January 24th, 2009 at 6:38 am
I believe the major difference between a debit and credit card is that if you use your pin, you are not covered by the credit cards consumer protection policies. Also, if you lose the card and thieves use it with the pin, the money they steal is gone. You are not reimbursed by the card company.
January 24th, 2009 at 8:24 am
To clarify EZ’s point…he is absolutely right that the federal liability protections are different for debit cards than for credit cards. And those differences do NOT benefit the consumer. Your liability depends on how quickly you report the loss or theft. To clarify though…it does NOT matter if you entered a PIN or not. It doesn’t matter if you ran it through as “credit”. What matters is that debit cards fall under the Electronic Funds Transfer Act, while credit cards fall under the Fair Credit Billing Act. Here is a compelling link… http://www.pirg.org/consumer/banks/debit/debitcards1.htm and here is the official story … http://www.ftc.gov/bcp/edu/pubs/consumer/credit/cre04.shtm .
Because of this, I only use my debit card for purchases where the card never leaves my hand (grocery stores, gas, etc.)
January 24th, 2009 at 11:49 am
I´ve had a VISA debit card for more then ten years, and have had no problems what so ever …
January 25th, 2009 at 3:59 am
Thanks for the accurate details, Lisa. I hate when this matter is misappraised!
I still carry a debit. I just keep the balance below $500. Liability sure whatever, it’s still just $500.
January 26th, 2009 at 9:45 pm
Not a big debit user (responsible credit card spender), but great tips on how to be on top of your debit card.
January 28th, 2009 at 5:49 am
I think a little common sense doesn’t hurt here..my daily debit card use is a whole lot easier than carrying a lot of cash..for me. it’s like having a roving checking account without carrying and writing the stupid checks out at each venue..
As far as liability..like I said a little earlier…a little common sense…larger purchases(well planned of course) stick with a credit card…everyday routine stuff…give me a debit card anytime