Brian Lis
3/22/11
Pd.2
Outline for Lesson (Debit Cards)
1. Introduction to Debit Cards
Debit cards have recently made a huge impact in the way we pay for our
purchases.
People prefer cards over cash because it is less to carry and much more safe.
Cards are safer because you can cancel your account if lost or stolen, making
card invalid.
Companies such as Visa or MasterCard use their cards as either debit or
credit, which is advantageous and crippling at times.
Pay with debit immediately; no bills at months end like credit card, deducted
from account directly.
Not always good, however, because you can overdraw your account and hurt
credit score.
Some things require credit cards to be used such as renting big name items or
putting down for security purposes. It ensures that you will pay the amount
owed.
2. Debit Card transactions
There are two types of ways that debit cards can be transacted
The first type of transaction is called an “on-line” transaction, this refers to
when you swipe your card, there is a screen that requires you to insert your
personal identification number (PIN) before the transaction will continue.
The PIN number is always four numbers long and is made by you when you
register for a card.
This is secure because unless somebody learns of your PIN number, they
cannot access your account information.
However, some places use off-line transactions which are much less secure
because you are not required to input your PIN number for these to occur.
This is definitely one way that debit cards can be bad because if the card is
lost or stolen, your information is not secured.
3. If stolen
Debit cards do not carry the same kinds of protection as credit cards. If your
debit card is lost or stolen and you report it within two business days, you are
liable for up to $50. If you report the problem between two and 60 days after
it occurs, you are liable for up to $500. So report it immediately.
If you do not notice and report the problem within 60 days, you could be
responsible for all unauthorized charges, according to Bankcard Holders of
America.
Credit cards are different in the fact that if lost or stolen, you are never liable
to pay for the expenses, but if not reported within 60 days, you can be held
responsible up to $50.
If you use a debit card, be sure you know what you have to do to limit your
losses if the card is lost or stolen.
4. The Cost of a Debit Card
With debit, like said before you do not have to pay bills at the end of each
month, but there are some catches.
Some banks can charge a “per-transaction” fee in which every time you make
a purchase, more than just the price of that purchase is paid.
For each purchase, you may be charged 25 cents or more for the product. This
is how banks make their money. This is called a service fee.
Other banks have different methods though, charging prices such as $1.25 or
$1.50 per month, regardless of the number of transactions.
5. Conclusion
So overall, it is not bad to have debit, but credit can always be helpful as well.