Safe Debit Cards
We've gone on and on about how great debit cards are. But you do have to be a lot more careful about when and where you use your debit card than you do with credit cards.
Keeping Your Identity
If someone steals one of your credit cards, the Federal Truth in Lending Act limits your liability to $50. However, debit cards don't fall under that category. Instead, debit cars are covered under the Electronic Funds Transfer Act, which only limits your liability to $50 if you contact your bank within two days after discovering that your debit card is missing. Wait for up to 60 days and you are liable for up to $500. Any longer and you could lose all the money in your account.
There are safe debit cards out there though, such as MasterCard debit cards and Visa debit cards. They have zero-liability policies when you sign your receipt instead of using your PIN number. The transaction goes through the MasterCard/Visa network when you sign instead of using your PIN. If you use your PIN, the money is automatically deducted from your account, so you lose that extra protection provided by the MasterCard/Visa network.
Speaking of a PIN, if you use your prepaid debit cards this way, your liability is also reduced--as long as you're the only one who knows your PIN and you don't keep it anywhere near your debit card. To ensure safe debit cards, don't respond to emails (even if they look "official") asking for your account numbers, passwords, PINs, etc. These are phishing scams, the goal of which is to get this personal information from you so the scam artists can get money from your account. Remember--any legitimate bank will never send you an email asking you for personal information.
All material copyright © 2008 About Debit Cards. All rights reserved.
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