The Debit Card Dangers You Never Knew Existed
Debit card dangers. It sounds like a great title for a bad romance novel. But it is not, it is a real-life risk we face. You purposely use debit cards to be financially responsible. The debit card automatically “debits” your savings or checking account. This guarantees you don’t buy $400 worth of electronics when you only have $300 in your account.
You thought you were doing the right thing by using your debit card instead of creating credit card debt.
And you are.
But there are specific debit card dangers.
Stay Alert to These Debit Card Dangers
Since debit cards are connected to your bank account, any fraudulent charges will automatically result in a withdrawal. And if you do not check your bank statements online or otherwise, the withdrawal can go unnoticed for quite a while. If you use automatic withdrawal for other bills, you may miss important payments such as rent or insurance premiums.
In many circumstances, credit cards extend greater consumer protections than debit cards. For example, let’s say you purchase framed artwork online. Once the purchase arrives, you notice you have been overcharged, so you dispute the charge. While you are attempting to resolve the issue with the seller, and while the credit card company investigates, you are not required to pay the disputed part of the bill.
On the other hand, if you used a debit card for the purchase, you would not receive this protection. The reason is when using debit the money is transferred out of your account almost immediately. The money is gone before you even receive the goods. How could you possibly freeze payment?
Once you discover your debit card has been used fraudulently, you should contact your bank immediately. But there is no guarantee you will recoup your money. This is especially true if you did not notice the fraudulent charges right away.
If you discover the fraud and inform your bank within two business days of learning of it, you will still be on the hook for $50. If you wait longer than two days, but fewer than 60 calendar days after your statement is sent to you, you may be liable for up to $500. Beyond 60 calendar days, there is no liability limit.
Lengthy Waiting Periods
Your bank has 10 days to investigate your claim. If the bank determines fraud occurred, it must replace the money within the next two days. That’s 11 days AFTER you brought the issue to the bank.
Avoid Debit Card Dangers
To minimize your debit card risks, follow these recommendations:
- Memorize your PIN number (and don’t use your birthday or SSN).
- Check bank statements regularly, or better yet, daily.
- Only use ATMs at known institutions.
- Keep a record of all your cards, PINS, and banks so you can call them immediately.
- Know your daily purchase and withdrawal limits.
- Never store your PIN with your card.