A debit card is a plastic card (size: 3-1/4” long x 2" high) which is similar to, and looks like, a credit card complete with Visa or Master card logo except that the word “ Debit ” is printed above the Visa or Master card logo. Some of the features of a debit card are:
It is issued by a bank when you open a checking or savings account.
It is not a credit card that will monitor your credit history.
It contains a 16-digit debit card number.
It also contains a 3-digit Card Verification Value (CVV) at the back of the debit card. The CVV is used for verification to avoid scams and frauds.
It shows the name of the debit cardholder, the year you originally received the card, and the month and year of expiration of the card.
It requires your full signature at the back of the card to determine debit card ownership.
The Benefits of Using a Debit Card
A debit card can be easily obtained from your favorite bank when you open a checking account.
It can be used to pay goods and services instead of cash or personal checks.
It can pay your purchases for goods and services that you made online.
It will save you some money for using few personal checks.
It will eliminate the work of reconciling your monthly bank statements with your canceled personal checks.
It will allow you to withdraw money from any ATM (automatic teller machine).
It is generally accepted by merchants over personal checks because the payment is automatically and electronically deducted from the debit cardholder checking account.
It is not subject to interest charges when you use it to purchase goods and services, unlike a credit card when you can pay the balance in installments.
It will allow you to over-withdraw from your checking account if you have an overdraft agreement with your bank. However, you have to pay your bank an overdraft fee for each overdraft transaction (usually $35 per transaction).
The Disadvantages of Using a Debit Card
It is limited to your current checking account balance where your debit card is linked to. It does not offer a revolving credit limit like a credit card. A credit card my have a credit limit of $10,500.00 which you can use anytime.
It will immediately and electronically deduct the entire amount for your goods and service purchases from your checking account. If you use a credit card, you may pay the entire amount in installments.
It will penalize you to pay overdraft fees of about $35 per overdraft transaction if you overdrawn your checking account balance.
It is easy to steal debit card information and use the debit card in fraudulent online purchases.
It is very easy for a thief to clean out all your money in your checking account where the debit card is linked to if the thief has your stolen debit card and PIN (personal identification number) and by accessing an ATM where the thief can verify your bank balance.
It has a greater liability compared to a credit card. If somebody fraudulently used your debit card, your liability will be:
(a) If fraud is reported within 2 business days – your liability is $50.00
(b) If fraud is reported after 2 business days but before 60 business days – your liability is $500.00
(c) If fraud is reported after 60 business days – your liability is unlimited
How To Protect Your Debit Card
The use of a debit card is very convenient and will save you some money. However, you should be careful in using it by taking the following smart actions:
1. Always keep and check your debit card in your wallet.
2. Never lose your sight on your debit card. If you are in a restaurant, pay your bills in cash or personally go to the cashier to watch the payment processing using your debit card.
3. Check your online bank account at least every 2 days to check all the bank transactions. If there is a fraudulent transaction, immediately call your bank to report the unauthorized withdrawal.
4. If your debit card is missing, immediately call the bank, request the cancellation of the missing debit card number, and ask for a new debit card and PIN. Also, immediately check your online bank account if there are unauthorized withdrawals.
Quote for the Day:
“Give generously to him and do so without a grudging heart; then because of this the Lord your God will bless you in all your work and in everything you put your hand to”. ( Deuteronomy 15:10)
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