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I like to think of myself as fairly fiscally astute, but can some explain to me why I would ever in a million years, want a debit card? The WSJ says the popularity if Debit Cards is at an all-time high--I just don't get it.
With a credit card I can float it for 40-50 days. Why would I ever want funds pulled from my checking account? Is there something I am missing?
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For smart people there's no reason. For people who have trouble with money and debt, though, debit cards can help to keep them out of trouble.
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You never need cash?
I use my debit card most often for getting cash at ATMs internationally. There are a good many countries where you cannot get by without cash, and even in countries where credit cards are widely used, you often get discounts by paying cash (common in Italy, for example). My credit union debit card does not have all the fees associated with getting cash from a credit card. Some credit cards also have foreign transaction fees on purchases that can be 2-3 percent (some ATMs have this, too, and they're often well hidden).
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For day to day purchases, a 40 day float is just not worth it, sometimes. One late payment and you can get hit with fees and jacked-up interest rates. I'm never late with a debit card payment.
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I use a plain ATM card to get cash. I refused the MasterCard-based debit card my bank offered me several years ago. I can't really think of a case where I would care to have a MC/Visa debit card over a regular MC/Visa and my ATM card. I wouldn't use it for purchases because in disputes or unauthorized use, it feels much more comfortable to dispute a billing I have not yet paid vs having to dispute to get already removed money put back into my account. Not to mention that with a regular credit card those purchases would earn miles/points/cash back. Very few debit cards have such a feature. So having a MC/Visa debit card to me feels like more of a liability with no real upside.
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One late payment and you can get hit with fees and jacked-up interest rates.
So don't make late payments. @:-)
In twelve years of making credit card payments I've been late exactly once, and the credit card company (Chase) refunded the late fee and interest.
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I have both a Continental Chase World Mastercard and a Continental Chase Banking MasterDebit.
I used the CC for Large purchase and the Debit for everything else day to day. (I always run it as Mastercard though)
-Vincent
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A credit card is for people who have good credit and manage money well.
A debit card is for people who do not have good credit or cannot manage money well.
An ATM card is for people who want to be able to access their cash from their existing checking or savings accounts.
Using a debit card as an ATM card can cost you money. A Debit Card can be used at a merchant who accepts Visa or Mastercard whereas an ATM card cannot be. Foreign travel is best with an ATM Card and a Credit Card. I have over 20 debit cards and have never used the first one for anything other than making a deposit at the ATM.
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A debit card is for people who do not have good credit or cannot manage money well.
An ATM card is for people who want to be able to access their cash from their existing checking or savings accounts.
Using a debit card as an ATM card can cost you money. A Debit Card can be used at a merchant who accepts Visa or Mastercard whereas an ATM card cannot be. Foreign travel is best with an ATM Card and a Credit Card. I have over 20 debit cards and have never used the first one for anything other than making a deposit at the ATM.
I am completely confused by your post. Most debit cards are also ATM cards. Mine works as both and it costs me nothing to use. I suspect it's very rare to find a straight ATM card these days, and to say a ATM/debit card is for people who don't have good credit is nonsense. Debit cards and credit cards both have benefits and are for different purposes. Not one of them covers every situation perfectly - you need both. I see no benefit to a straight ATM card when I can get an ATM/debit card that can be more widely used and costs me less. Debit cards allow you to get cash at point-of-sale for no extra fees and avoid ATM surcharges. For example, I can get $40 cash at Trader Joe's using a debit card, pay no transaction fee and money comes out of my account in 1-3 days. Or I can go to an ATM machine to get $40, pay a $1.50-$3 fee and the money is deducted from my account immediately.
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I am completely confused by your post. Most debit cards are also ATM cards. Mine works as both and it costs me nothing to use. I suspect it's very rare to find a straight ATM card these days, and to say a ATM/debit card is for people who don't have good credit is nonsense. Debit cards and credit cards both have benefits and are for different purposes. Not one of them covers every situation perfectly - you need both. I see no benefit to a straight ATM card when I can get an ATM/debit card that can be more widely used and costs me less. Debit cards allow you to get cash at point-of-sale for no extra fees and avoid ATM surcharges. For example, I can get $40 cash at Trader Joe's using a debit card, pay no transaction fee and money comes out of my account in 1-3 days. Or I can go to an ATM machine to get $40, pay a $1.50-$3 fee and the money is deducted from my account immediately.
The fees or lack thereof you mention have nothing to do with a debit card in general and everything to do with the policies of your issuing bank, apart from the $1.50-$3 ATM owner's fee. Whether or not to charge a fee for PIN-based point-of-sale is up to the issuing bank, and some do charge for these, just as they charge their own fee for using an ATM that is not theirs. But I can still avoid all that with a plain ATM card if I use the ATMs of my own bank. And get this, I can use my plain ATM card at merchants for a PIN-based transaction. I've been able to do that for many years, even before MC/Visa debit cards became popular. The PIN-based transaction is the only one that allows you to get cash at point-of-sale, so in that way the plain ATM card is still the same. The only thing the plain ATM card can't do is a signature-based Visa/MC transaction. And why do I need it to?
And straight ATM cards are not rare to find, they are just no longer issued by default to most account holders. If you ask a bank/credit union for a plain ATM card instead of the Visa/MC debit, I'd be really surprised if they said "No, we don't issue those anymore". I just got my worn out plain ATM card replaced a few months ago. My bank even bothered to update the graphic design on it sometime in the interim. And there are still plenty of account holders who quite simply would not qualify to have the Visa/MC debit card.
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CrazyOne: Great. But please look at the post I was responding to.
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...because if you have the Citibank premium AA debit card (and you use it "as" a credit card), you get one mile for every dollar you spent (TWICE the going reward rate); the annual fee is less than most credit cards, and you NEVER get a bill!
- MJ
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CrazyOne: Great. But please look at the post I was responding to.
I dunno. I can't find much to disagree with in that post you responded to. Maybe could have been worded better. The first line about debit being for those who can't manage credit is debatable, perhaps, but then again I live with a woman who refuses to get a reward-earning credit card for precisely that reason. (She's afraid the bill will get away from her. I can't see how it's that different than what she's already doing, but oh, well, her call.) The one line that isn't much argument is "Using a debit card as an ATM card can cost you money." It should not ever cost any more than using a standard ATM card, at least not that I know of, so that's no particular argument against the debit.
You certainly have a much bigger problem in my opinion if your Visa/MC debit card is stolen (or lost then found by someone who takes advantage) overseas (or at home, true just the same) vs a Visa/MC/whatever credit card. Someone who gets the debit card can empty your bank account, possibly rather quickly before you have a chance to report the loss/theft. This is much more of an issue when abroad where getting help and more cash could become quite the ordeal. That situation can never happen with a billing credit card.
Which isn't to say everyone should just cut up their debit cards. There is a place for them. But ultimately, I'd have to lean towards agreeing with the OP's query, confirming that he is not missing anything. None of the things mentioned here, including the AA debit mentioned above, are really that compelling. (There are other non-debit ways to get 1:1 AA miles for reasonable annual fees as I recall, plus many other rewards one can get, perhaps the most notable these days being the 1%/5% cash back, on credit cards with no annual fee at all.)
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You certainly have a much bigger problem in my opinion if your Visa/MC debit card is stolen (or lost then found by someone who takes advantage) overseas (or at home, true just the same) vs a Visa/MC/whatever credit card. Someone who gets the debit card can empty your bank account, possibly rather quickly before you have a chance to report the loss/theft.
Actually, I believe I would face less of a problem with a Visa logo on my debit card than you would with a straight ATM. My debit card comes with full fraud protection and no liability for me. With debit cards, the money can also take 1-3 days to be debited from your account (unlike ATMs where the money is pulled immediately). If someone gets into your account through your plain ATM, unless your bank offers better protection you may be out just $50 if you report within two days, but after that the amount increases to $500. Not having a signature option gives a bit more protection, but it's far from fail-safe. There are numerous ATM card scams, including skimmers that can capture your numer and PIN. Just last week people around the US had their accounts compromised and their PINs stolen, possibly from a retailer. http://www.msnbc.msn.com/id/11731365/
I guess I see no valid arguments against debit cards and for ATMs here - in your own case, it seems to be simply personal preference.
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Actually, I believe I would face less of a problem with a Visa logo on my debit card than you would with a straight ATM. My debit card comes with the same protection as most credit cards - I'm responsible only for the first $50 taken from my account. With debit cards, the money can also take 1-3 days to be debited from your account (unlike ATMs where the money is pulled immediately). If someone gets into your account through your plain ATM, unless your bank offers better protection you may be out just $50 if you report within two days, but after that the amount increases. Not having a signature option gives a bit more protection, but it's far from fail-safe. There are numerous ATM card scams, including skimmers that can capture your numer and PIN. Just last week people around the US had their accounts compromised and their PINs stolen, possibly from a retailer. http://www.msnbc.msn.com/id/11731365/
I guess I see no valid arguments against debit cards and for ATMs here - in your own case, it seems to be simply personal preference.
It is personal preference for me, no doubt. I'm not denying that, just explaining how I came to that preference. I'm not really trying to put forth an argument against debit cards as whole, just to quantify some of the reasons why someone like me or the OP would not be interested.
I hate to draw this out, but I just want to point out a couple of things about the above. One, I'm familiar with the article you linked, having seen it last week. It's important to be clear what the investigators think happened here: they think someone compromised the software of retail store(s) that incorrectly saved PINs from PIN-based transactions. (PINs are supposed to be discarded.) Once someone has the card number and PIN, they can encode a dummy and use it to get cash out of an ATM, a much better racket than buying merchandise and having to sell it to get cash. The article itself is no argument for or against debit or ATM. It does suggest that PIN-based transactions at stores can be compromised, which is an issue as they were always seen as being more secure than signature-based. I don't make PIN-based transactions at stores. I use a regular credit card (signature-based, bill me later) or cash. While these can arguably be compromised more easily, they will not include PIN info that can get a thief cash.
As far as the security issue goes, I'm not thinking of skimmer scams or bank policies in that case, as they should be equal for ATM and debit cards. Unauthorized cash withdrawal is unauthorized cash withdrawal. In each case the PIN was somehow compromised. The bank policies should not be different. But if a thief gets the card itself, with the ATM card it's useless unless he's going to guess PINs or have a way to try 10,000 codes in a few seconds at the ATM without anyone seeing. If the thief gets a debit card, he has all the info needed to make purchases, including those extra 3 numbers on the back. ATM-only card is not fail safe, no (as evidenced by the article you linked and various skimming possibilities). It just has one less method of misuse.
I'm aware of the $50 limit of liability (typically not even enforced at $50; I've never heard of someone actually being out the $50 in case of fraud). I'm thinking of the practical reality. Have you ever experienced unauthorized withdrawal/charges with your debit card? If you have, how long did it take for them to put the money back into your account? Will they instantly upon your say so put all the cash (or all but $50) back into your account while they investigate? From what I have heard (family member experience), the answer is no. You will be out the cash for days or weeks while certain things are tracked down by the bank. Only then will the disputed money be returned to your account. This is the situation that can not happen when using a billing credit card instead.
All this discussion has ignored the few weeks or more of free credit (mentioned by the OP, though) that one gets with a credit card when you pay the balance in full every time. Plus there's the points earning (though it is possible to get that with debit cards from a very few major banks).
I'd still say I'm not missing anything by not having a debit card.
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All this discussion has ignored the few weeks or more of free credit (mentioned by the OP, though) that one gets with a credit card when you pay the balance in full every time. Plus there's the points earning (though it is possible to get that with debit cards from a very few major banks).
I'd still say I'm not missing anything by not having a debit card.
I wasn't debating credit vs. debit/ATMs. I'd say 99 percent of my spending is with my American Express and my UA Chase Visa. Absolutely, if you don't carry a balance, low- or no-fee credit cards that earn points are the way to go for most spending. I was only answering the question as to why I feel it is also necessary for me to have a debit card. The credit card fees can be outrageous for foreign transactions and cash withdrawals, and I believe I have more benefits with a Visa debit card than with a plain ATM.
To answer your question, while my Visa debit card says they will immediately restore any money taken fraudulently from my account, I've fortunately never had to test this.
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<<still say I'm not missing anything by not having a debit card.>>
Except for the convenience of obtaining cash from a merchant at point of purchase, rather than making an extra stop at an ATM, unless you can do this with your ATM card?
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<<credit card fees can be outrageous for foreign transactions >>
I believe you will find that most banks have quietly applied the same fees to foreign Visa/Mastercard debit card transactions. The difference is that credit card statements now itemize the fees while debit cards may still conceal them in the exchange rate. On a trip to the UK in which I tried to test this the exchange rate used by my bank for ATM withdrawals was a couple percentage points less favorable than that used by American Express who then added a fee.
dennis
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<<still say I'm not missing anything by not having a debit card.>>
Except for the convenience of obtaining cash from a merchant at point of purchase, rather than making an extra stop at an ATM, unless you can do this with your ATM card?
As I mentioned above, this is possible with a normal ATM card. I don't know how far and wide mine works, but I have in the past used it a number of places. It works on this network, for instance http://www.star.com/ which claims to have over a million retail locations in the US. I doubt it would work in that manner outside the US, although I don't think that is any different than a branded debit card. With either card, you need a PIN-based transaction to get cash.
It is possible that Visa/MC have pushed banks to have better policies regarding fraudulent use and putting money back into accounts tied to the debit cards, which can only be a good thing for those who use them.
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I like to think of myself as fairly fiscally astute, but can some explain to me why I would ever in a million years, want a debit card?I doubt you're missing much. I've had one in the last twenty years (started as an ATM card and morphed into debit card) and it's never made it into the wallet.
I have my favorite CCs (one U.S. and one Euro-based) and then I also rotate through a stack of other U.S. and Euro CCs, just to distribute points to various programs. On the side, I keep enough cash to get by, stashed on my person. This applies to out-of-country trips as well.
Even my credit union's campaign of "Find the weirdest place on Earth that accept debit cards and maybe win $500" couldn't motivate me.
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...because if you have the Citibank premium AA debit card (and you use it "as" a credit card), you get one mile for every dollar you spent (TWICE the going reward rate); the annual fee is less than most credit cards, and you NEVER get a bill!
- MJ
You get 1 mile for every dollar you spent on AAdvantage Credit Card issued by Citi - with first 12 months fee waived, and 15K to 20K sign up bonus to boot.
You get 5% rebate on "everyday purchases" on Citi's Dividend Select Credit Card and no annual fee.
Why anyone would want the card you mentioned ?
Besides, what is the point about "you NEVER get a bill" ? Of course you dont get a bill, because money coming out of your account immediately - and if you need to dispute the withdrawal, you would have to fight to get it back - what is the good point about it ?! With a credit card, you get a detailed statement to compare with your spending, you dispute the erroneous charges - sometimes a merchant's machine can mistakenly run the charges TWICE and you would not know it if you NEVER get a bill. It happened to me on a few Gas Station purchases, and even at a Publix, a major supermarket chain in Florida - their machines malfunctioned and sent the charge tape twice - Citi refunded the double charges when called to dispute, and later Publix sent out the corrected tape, so the credit actually went thru TWICE.
My credit cards also give an annual expense report - not that I really need it, but it is kind of nice to see your expenses are being itemized and neatly shown under each category - so you know where your money went.
Really debit card is for those who are lack of financial disciplines, who dont know how to manage their money ... it is like some people are willing to have more tax withheld from their paychecks and then get a tax refund as a "forced" saving, while letting government using their money interest free ... it is not a very good analogy, but to me, saying debit card is better than credit card because you NEVER get a bill ... is on the same line as the "I got a nice tax refund check" ...
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The ATM withdrawal has an exchange rate that is actually worse than the credit card transaction, but the credit card has a separate item of the fee added on the statement as now the law requires credit card companies explicitly show the fee as a line item.
But my credit card rebates 5% on all gasoline purchases, supermarket purchases and 1% on other transaction, so that helps to reduce the extra fee. At the same time, I get nothing back from my ATM/debit card.
Bottom line, other than using it to get cash / local currency I cannot think of any usage for my ATM /debit cards although I have 2 in my wallet all the time but they just stay in. :-)
I secretly wish ALL my bills can be paid by credit card so I can have summarized report as well as earn points/miles/cash rebates ... Alas, life is not perfect, I still need to pay utilities by electronic check instead of credit card, for example, ditto for property tax, and tax to Uncle Sam unless you pay a usage fee ... To the praise of our Florida state government, now I can pay our car license, renew driver license with credit card WITHOUT fee, online !
<<credit card fees can be outrageous for foreign transactions >>
I believe you will find that most banks have quietly applied the same fees to foreign Visa/Mastercard debit card transactions. The difference is that credit card statements now itemize the fees while debit cards may still conceal them in the exchange rate. On a trip to the UK in which I tried to test this the exchange rate used by my bank for ATM withdrawals was a couple percentage points less favorable than that used by American Express who then added a fee.
dennis
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I believe you will find that most banks have quietly applied the same fees to foreign Visa/Mastercard debit card transactions.
I'm sure many have. Fortunately, my credit union debit card does not.
I just made some purchases in Canda. Here's the xe.com exchange rate and what I got on my debit card and my *wood Amex for purchases made on the same day:
xe.com CAD$20=US$17.27
debit card CAD $20=US$17.67
*wood Amex CAD$20=US$18
My UA Chase Visa would be probably be 1-1
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I also use debit card only for cash withdrawal here and abroad. For everything else, there's American Express Starwood card. :D
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here in the UK debit cards over take both cash and credit card spending. Banks are more willing to give them out as it is low risk of customers going OTT and going beyond their means.
There is a bank now that offers cash back on debit card spending in an attept to improve it's standing in the debit card business.
personally, even though I have one all my spending goes on my Virgin atlantic card, even though it has got me in trouble at month end! :D
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Happy,
To clarify:
If you have the Citibank premium AA debit card (and you use it "as" a credit card), you get one mile for every dollar you spend, which is TWICE the going reward rate for DEBIT cards (most are one mile earned for two dollars spent).
Although if you keep an average daily checking account balance of $25,000 with Chase, they'll give you a "one mile for one dollar spent" Continental Airlines debit card too (and I suspect that other banks ie.. BofA with Alaska, may have similar deals if you keep huge balances in your checking account).
For me, my Citibank checking account has had excellent customer service, and I think their premium AA debit card is a good product for my lifestyle. Modest annual fee, one mile for one dollar spent, and I never have to worry about bills, interest, or late fees. I also have a traditional Citibank AA M/C, Citibank business AA M/C, and Citibank AA Amex among other airline/hotel FF credit cards, but I tend to use my Citibank AA debit card most frequently.
Hope that helps.
- MJ
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Happy,
Just a couple more things about "my Citi debit card." After over 1000 charges, I've never had to dispute a withdrawal, nor dispute an erroneous charge, nor had a merchant's machine mistakenly run a charge twice. But if any charges WERE done incorrectly, I would know immediately, because I can see a detailed account summary of all my deposits, withdrawals and charges from my checking account on Citibank's website.
I have no need nor desire for an annual expense report with my debit card, but just so you'll know, all my charges ARE detailed on both my monthly statement, AND immediately on-line.
I realize that there is more financial protection with a credit card than a debit card. That is a risk I am willing to take. And if I ever did have an issue with my card, since I have had excellent customer service from Citibank, I expect that they would handle it professionally and correctly.
I never said a debit card is BETTER than a credit card, it's a different product for different uses.
And I do think it's a tad presumptuous of you to issue a blanket statement that "debit card is for those who are lack of financial disciplines, who dont know how to manage their money."
It works for me, is doesn't for you. So be it. Live and let live.
- MJ
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I have used my Visa ATM/debit card for an actual "purchase" perhaps a half-dozen times: a) once or twice at the supermarket to get cash back, as my immediate neighborhood does not have a branch of my bank for fee-free ATM withdrawls and b) as a secondary linked card with for Delta miles with Rewards Network (f/k/a iDine) at joints that do not accept AMEX.
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Really debit card is for those who are lack of financial disciplines, who dont know how to manage their money ... it is like some people are willing to have more tax withheld from their paychecks and then get a tax refund as a "forced" saving, while letting government using their money interest free ... it is not a very good analogy, but to me, saying debit card is better than credit card because you NEVER get a bill ... is on the same line as the "I got a nice tax refund check" ...
And here I thought I had a Debit Card so I could earn miles at a cost of $16 per 25,000 miles. But I guess it takes all kinds. I dont see your Debit card to Tax refund" leap. A rather large and dubious jump, imho.
Ken in Phx
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My one ATM/debit (w/o Visa logo) is from my credit union. I mainly use it to withdraw from ATM downstairs at my workplace. I also use it as an ATM in foreign countries. My credit union caps my withdraws at $300/day. Plenty of $ for me as I don't spend anywhere that much. $300 can last me a few days up to a week, depending on country.
I have a credit union Visa & an UA visa. I use my CU Visa in foreign countries as my CU only charges me the 1% Visa charges, not 2-3% more that my UA card charges. Both cards have rewards and are used quite alot. I, of course, pay the bill every month. If I can't ever pay the whole bill, I would carry a balance on my CU Visa as it is only 9.9% interest. (and it's been that way for the last 10 years!). At time, my CU runs a 2.9% interest promo. :). I have a very trusted relative on my UA card so it gets some heavy use. The bill gets paid promptly! :) ^
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dup post
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<< And here I thought I had a Debit Card so I could earn miles at a cost of $16 per 25,000 miles >>
How ??
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Actually, I believe I would face less of a problem with a Visa logo on my debit card than you would with a straight ATM. My debit card comes with full fraud protection and no liability for me. With debit cards, the money can also take 1-3 days to be debited from your account (unlike ATMs where the money is pulled immediately). If someone gets into your account through your plain ATM, unless your bank offers better protection you may be out just $50 if you report within two days, but after that the amount increases to $500. Not having a signature option gives a bit more protection, but it's far from fail-safe. There are numerous ATM card scams, including skimmers that can capture your numer and PIN. Just last week people around the US had their accounts compromised and their PINs stolen, possibly from a retailer. http://www.msnbc.msn.com/id/11731365/
I guess I see no valid arguments against debit cards and for ATMs here - in your own case, it seems to be simply personal preference.
From someone who had worked in this ATM/Debit/Credit business for years, let me properly define the terms for ATM, debit and credit transactions. There are basically 2 types of transactions, PIN based (debit) or signature based (credit). An ATM or debit transaction is PIN based whereas a credit transaction is signature based. Note, I am talking about transactions here, not the cards because an ATM transaction can be initiated by an ATM card to withdrawl money from the checking account or from a credit card to abtain cash advance. A credit transaction can be initiated by a credit card or a ATM card with a VISA/MC logo on it, which is called a check card, the transaction is authorized by signature. A debit transaction is a puchase using an ATM card, w/wo VISA/MC logo, the transaction is authorized by PIN.
The protection and/or liability depends on the type of transaction, not type of card. A PIN based transaction has NO protection what so ever until you notified the bank about lost/stolen/comprimise of PIN. OTOH, a credit transaction have the all sorts of protection for unauthorized usage either before or after you reported the lost/stolen.
In fact, a real debit card is an ATM card without the VISA/MC logo, you can use it to get cash at the ATMs, you can also use it to purchase at stores and get cash back to avoid the dreaded ATM surcharge.
By putting the VISA/MC logo onto an ATM card, it enables the card to be used for credit transactions on a debit account (checking), which can cause major problem it the card was lost/stolen, your checking account can be drained, checks will bounce, pre-authorized ACH debit will fail. Anyone who is credit worthy of a credit card should ask their bank to issue them a real debit card and cut up all those check cards.
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The protection and/or liability depends on the type of transaction, not type of card. A PIN based transaction has NO protection what so ever until you notified the bank about lost/stolen/comprimise of PIN.
That's not the case. VISA began their debit card Zero Liability program in April 2000 and no longer has the notification requirement.
With the new Zero Liability policy, you’re no longer required to report fraudulent activity within two days and you’re not responsible for any fraudulent transactions made over the Visa network.
The Zero Liability policy covers all Visa credit and debit card transactions processed over the Visa network—online or off. The only transactions not covered under the Zero Liability policy are commercial card, ATM, and non-Visa-branded PIN transactions.
While it doesn't apply to transactions at an ATM (cash withdrawals), most have low daily a limit on what you can pull out of an ATM, greatly limiting your exposure to risk. Even if Visa does not provide the Zero Liability protection to funds taken from an ATM the issuing institution may. My credit union does.
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That's not the case. VISA began their debit card Zero Liability program in April 2000 and no longer has the notification requirement.
With the new Zero Liability policy, you’re no longer required to report fraudulent activity within two days and you’re not responsible for any fraudulent transactions made over the Visa network.
Note that zlc was talking about PIN-based transactions. PIN transactions are not processed over the Visa network. PIN transactions are processed over networks such as NYCE and Star (traditionally ATM networks). Only signature-based transactions get processed over Visa/MC networks. There are also different fees associated with each type of network which is why banks are more willing to give incentives for using the signature-based transactions.
Some individual debit card issuers (such as your credit union apparently) will protect against PIN-based fraud, but Visa/MC certainly will not since it has absolutely nothing to do with them.
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Note that zlc was talking about PIN-based transactions. PIN transactions are not processed over the Visa network. PIN transactions are processed over networks such as NYCE and Star (traditionally ATM networks). Only signature-based transactions get processed over Visa/MC networks. There are also different fees associated with each type of network which is why banks are more willing to give incentives for using the signature-based transactions.
Some individual debit card issuers (such as your credit union apparently) will protect against PIN-based fraud, but Visa/MC certainly will not since it has absolutely nothing to do with them.
Yes, thanks. What is interesting, if you read the whole thread, is that people were making the case that ATM cards are safer because they may only be used with a PIN, no signature option. They felt debit cards exposed you to more risk because of the signature option. I was pointing out that that's not the case with Visa's protections.
People seem to be all over the board on which one's safer. I have full protection with my Visa debit; others feel more comfortable with their PIN-only ATMs because they don't have a signature option yet Visa covers that and we've just had a huge PIN theft ring. It seems to me it's a matter of what extra protections your banking institution is willing to provide and your own personal preference. I don't think anyone can honestly make a blanket statement that one is safer than the other, but I guess we can all feel our own choice is best.
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Yes, thanks. What is interesting, if you read the whole thread, is that people were making the case that ATM cards are safer because they may only be used with a PIN, no signature option. They felt debit cards exposed you to more risk because of the signature option. I was pointing out that that's not the case with Visa's protections.
The point about exposed to risk, is not whether VISA has the protection or not, it is becaused the accounts involved is your EVERYDAY checking account. Do you want your mortgage to be in default when someone stole your check card and cleared out your account?
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The point about exposed to risk, is not whether VISA has the protection or not, it is becaused the accounts involved is your EVERYDAY checking account. Do you want your mortgage to be in default when someone stole your check card and cleared out your account?
How is that risk any different for an ATM or a debit card? Both make debits from your checking. With an ATM and the PIN I can make cash withdrawls from someone's checking account. Both cards allow for purchases at stores, so both cards expose you to risk beyond limits of what can be pulled out of an ATM per day. I just don't see the difference, and I actually see greater protection offered to Visa debit cards.
It seems to be the best protection is to monitor your accounts frequently. But, as someone who uses a Visa debit card, I'm certainly interested in how I might be putting myself at greater risk than necessary.
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How is that risk any different for an ATM or a debit card?
Because it needs a PIN!
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Because it needs a PIN!
But Visa, with the Zero Liability protection policy I mentioned above, provides me with complete protection on signature-based transactions. And we know PINs can be compromised (did you see the story on the numerous stolen PINs recently). I'm not trying to be argumentative, I just don't understand where I have greater risk.
Actually, as I go back and read your posts, I'm not sure which you're in support of - the PIN-based ATM card or the debit card that could be co-branded with Visa and has the PIN and signature option.
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How is that risk any different for an ATM or a debit card? Both make debits from your checking. With an ATM and the PIN I can make cash withdrawls from someone's checking account. Both cards allow for purchases at stores, so both cards expose you to risk beyond limits of what can be pulled out of an ATM per day. I just don't see the difference, and I actually see greater protection offered to Visa debit cards.
It seems to be the best protection is to monitor your accounts frequently. But, as someone who uses a Visa debit card, I'm certainly interested in how I might be putting myself at greater risk than necessary.
It's a lot easier to forge your signature than steal your PIN. The check card has all the risk an ATM card has plus the added risk of signature based transaction, although VISA protects this part of the transaction, you won't get your money back right away while your checks starts to bounce.
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It's a lot easier to forge your signature than steal your PIN. The check card has all the risk an ATM card has plus the added risk of signature based transaction, although VISA protects this part of the transaction, you won't get your money back right away while your checks starts to bounce.
OK ... now I understand your position. For someone, who can cover whatever is in their checking account until it's reimbursed through the protection policy, this would be inconvenient, but not a major problem.
I was initially confused though by this comment as to which card you most favored.
A PIN based transaction has NO protection what so ever until you notified the bank about lost/stolen/comprimise of PIN. OTOH, a credit transaction have the all sorts of protection for unauthorized usage either before or after you reported the lost/stolen.
I prefer the protection and knowing that I have the funds to cover any interim losses.
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Actually, as I go back and read your posts, I'm not sure which you're in support of - the PIN-based ATM card or the debit card that could be co-branded with Visa and has the PIN and signature option.
Let me clarify what I meant, a PIN based transaction, ATM or purchase should be done against a checking account while a signature based transaction should be done against a credit account, both are fine with me. What I don't like is this so called check card which allows signature based transaction to be done against a checking account.
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For someone, who can cover whatever is in their checking account until it's reimbursed through the protection policy, this would be inconvenient, but not a major problem.
For someone who can cover their checking account, can you name one single benefit a check card has that a credit card does not?
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For someone who can cover their checking account, can you name one single benefit a check card has that a credit card does not?
How about two ... I can't get cash from an ATM with a credit card without paying huge fees, and my debit card gives me great exchange rates on international purchases. From one of my posts further back based on a recent trip to Montreal:
xe.com CAD$20=US$17.27
debit card CAD $20=US$17.67
*wood Amex CAD$20=US$18
My UA Chase Visa would be probably be 1-1
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How about two ... I can't get cash from an ATM with a credit card without paying huge fees, and my debit card gives me great exchange rates on international purchases. From one of my posts further back based on a recent trip to Montreal:
That's what I guessed, one less card in the wallet. :)
Do you know that you can get all those benefits simply by using the plain old ATM card? Oh I forget, the banks don't issue those pure ATM cards any more unless you ask :)
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Incidentally, both debit and credit cards are going to be switching to PIN-based transactions over the next several years (see, for example, "Chip and PIN (http://www.chipandpin.co.uk/)" in the UK).
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That's what I guessed, one less card in the wallet. :)
:) But I don't have a straight ATM card ... so it would be a one-for-one exchange. And here you got me all excited about having more room in my wallet for another FF card.
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Here is my opinion on Debit Cards versus atm cards.
I refuse to use a debit card for any transactions accept withdrawals at an atm. The same holds true with an atm card. The reason is that these transactions are pin based which while not 100% secure are relatively secure.
On the other hand if you have a debit card you can use it to make debit or credit transactions. If you go the credit route you are protected by Visa or Mastercard if their are fraudelent charges but as other members said you are still without those funds until the whole situation is straightened out. In addition, when you make credit transactions your card number is circulating in several databases quite possibly and thieves who gain access to these databases can then steal your account number and create a forged card or shop online with your debit card number. If you choose to go the debit route well now your pin number is floating around in databases from various merchants and thieves could steal your pin number and wipe out your account by creating a forged debit card just like recently happened to thousands of customers at various banks across the country.
On the other hand if you have an atm card and strictly use it for withdrawals or deposits and make sure that there aren't skimming machines or cameras that are their for illegal purposes like stealing your account number and pin then the only institutions to have your pin are those of the atm network and I would imagine that the companies who maintain atms have higher security then the various merchants out there where one would use a debit card for debit/credit transactions.
So in my opinion while there are safegaurds in place and security provided by visa/mastercard for using a debit card the more places one uses a debit card the more places that have this information and quite possibly have stored it improperly. It is just like a person who takes an airplane 1 time a week for 50 years is more likely to experience a technical problem on an airplane like a crash or emergency landing then someone who flies only twice in their life. Obviously, nothing can make you 100% safe but I feel more secure in knowing that my atm card number is not floating in thousands of different databases.
In addition, I love the perks my credit cards give me and the grace period so my money can earn interest until the due date on my credit card. These in themselves are enough to keep me a loyal credit card user.
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If you choose to go the debit route well now your pin number is floating around in databases from various merchants and thieves could steal your pin number and wipe out your account by creating a forged debit card just like recently happened to thousands of customers at various banks across the country.
This is NOT true unless you have a crooked merchant, the security of a debit perchase transaction is the same as an ATM withdrawel, the PIN is encrypted right where you enter it. You should always pay attention to the device/PIN pad you are given, never enter your PIN on a computer keyboard or the like.
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ZLC, what you say is true about the pin being encrypted but the fact of the matter is that it has been shown that although the transactions are encrypted some merchants have stored the pins by accident as that is how their systems are configured and the encryption key is often on the same server as the pin. This is the reason why so many people had their bank accounts wiped out recently because thieves hacked into merchants servers and obtained the pin numbers along with the debit card number. If you did a google search you would see the many news reports which have stated this.
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ZLC, what you say is true about the pin being encrypted but the fact of the matter is that it has been shown that although the transactions are encrypted some merchants have stored the pins by accident as that is how their systems are configured and the encryption key is often on the same server as the pin. This is the reason why so many people had their bank accounts wiped out recently because thieves hacked into merchants servers and obtained the pin numbers along with the debit card number. If you did a google search you would see the many news reports which have stated this.
I do not know the detail about how the PIN was compromised in that incident. However, what I do know is that the encryption device/chip is right in the PIN pad itself, so even if the merchant stores the "PIN", its an encrypted version of the PIN, besides the encryption key changes every certain number of transactions or every certain minutes, whichever occurs first. So those encrypted PIN has no use for future transactions, nor can anyone decode the PIN unless they know the key for that moment.
However, I did hear that some small processor/bank did not use any encryption between the merchant and itself, which is clearly in violation of network rules, that will cause the PIN to be transmitted in clear and if the merchant happens to store the PIN, it will also be in clear. This scenerio will also happen if you are using a 3rd party, ie non-bank ATMs and the ATM owner decides not to use any encryption. That's why I never go to non-bank ATMs to get cash.
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I may be mistaken, but I believe that with the "chip and PIN" system, the PIN is actually never transmitted, but instead used as a key for the encryption used by the chip on the card. So there's some hope for better security on PIN-based transactions in the future. A crooked PIN pad is still a possible problem, though.
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WHY would You ever want a Debit Card
One thing cash advance is a main factor
You do a cash advance off a credit card here is a few things to think about
1 most APR ( Annual Percentage Rate for those who DONT KNOW) is usually around 23.99 V apr which accures interest daily. so factor this lets say you do a cash advance for 200.00 to figure the Finance Charge for that you take 23.99V is that is you apr for cash advance and this is a example only .2399 / 365 x 31 x 200.00=
and normally Cash advance the last to be paid off .. then you do the math if you carry a balance
One thing I will argue a point. Someone posted in a earlier post Debit card for those who cant manage money
Well I can manage my money Very well. MY home my 10 arces of land and my vehicles all paid off and I will use my Debit card before I use my credit card ONE because I earn miles on my debit card like credit cards and second reason. If I have the money why use a credit card I dont want Debit. If i have the money why not pay for it and be done.
So I can worry, sorry My statement didnt arrive now you have to call the credit card company and say can you waive Late charge and finance charge
no thank you
I have 2 credit cards and If I dont have to use them I dont. If my debit card does the same thing why bother.
But that is for me and me only what works for me might not be for someone else