Drug testing

Debit Card vs. Credit Card, What Are The Differences ?

Ah, the "good old days". If you are a baby boomer, like me, then you probably remember how important it was to rush to the bank on payday. You had to get there before the teller lanes closed so that you could have your "cash allowance" for the week. Otherwise, if you needed cash you had to write a check, then go to the bank, and "cash" the check for real cash.

Fortunately the days of the mad rush to get cash from the bank are long gone. We now enjoy the convenience of using a nearby automatic teller machine (ATM) or you can even get "cash back" at your local grocery, hardware or convenience store.

The card you use at the ATM is known as a debit card. When debit cards first appeared it was easy to tell them apart from credit cards. Debit cards didn't have a credit card company logo on them; instead, they usually just had your bank name, your account number and your name.

Today debit cards look exactly like credit cards even carrying the same logos. Both types of cards can be swiped at the checkout counter , used to make purchases on the internet, or to pay for the fill-up at the gas pump.

When you use your debit card to make a purchase, it's just like using cash. The account that is attached to your debit card, in most cases your checking account, is automatically debited when you use your debit card. The cost of your purchase is deducted from the funds you have in that account.

On the other hand, when you use your credit card to make a purchase you are using someone's else's money, specifically the issuer of the credit card, usually a banking institution.

In effect, you agree to pay them back the money you borrowed to make your purchase. In addition you will also pay interest on the money "loaned" to you at the rate which you agreed to when you applied for their credit card. This is known as the annual percentage rate (APR).

While the two cards might act and look alike, the levels of consumer protection that each type of card provides can be different.

Under federal law, if someone steals your credit card you're only responsible to pay the first $50 of unauthorized charges. However, if you notify the credit card issuer before a thief is able to make any charges you may be free from all liability. If the credit card is not physically present when an unauthorized or fraudulent purchase is made, such as over the internet, you're also free from liability for those charges.

MasterCard and Visa offer zero-liability protection where you won't pay any charges if someone uses your credit card to make an unauthorized purchase.

The protection offered to debit card fraud is similar but with a few exceptions. For example, your liability under federal law is limited to $50, the same as for a credit card, but only if you notify the issuer within two business days of discovering the card's loss or theft. Your liability for debit card fraud can jump up to $500 if you don't report the loss or theft within two business days.

And if you are the type of person that gives a passing glance to your monthly bank statement, you could be totally liable for any fraudulent debit card charges if you wait 60 days or more from the time your statement is mailed.

Visa and MasterCard zero-liability protection applies to your debit card but only for transactions that do not involve the use of your PIN (personal identification number).

Additional protection against fraudulent use of your credit or debit cards may be available through your homeowner's or renter's insurance. Check your policy or with your agent for more information about your coverage.

Also be aware that you should contact your card issuer by certified letter, return receipt requested, after you've contacted them by phone to protect your consumer rights.

As for which card to use for what type of purchase, most experts agree that you should use your debit card for the same type of purchases you'd make as if you were using cash. Therefore, it makes more sense to use your debit card than your credit card at the grocery store or gas station (provided you have sufficient funds to cover these purchases of course).

Avoid using your debit card for any online purchase or for something which is expensive. Why ? You'll find it much easier to dispute a charge when you use your credit card. If your gold-plated, limited edition, hip-swinging Elvis wall clock arrives broken, your credit card company will remove the charge until the problem is resolved.

With your debit card you are stuck dealing with the merchant directly to resolve any problems with a purchase, even if your banking institution could really use a gold-plated, limited edition, hip-swinging Elvis wall clock of their very own.

? 2004, www.yourfreecreditreportnow.com
Author: James H. Dimmitt.
James is editor of "TO YOUR CREDIT", a weekly free newsletter. Subscribe to the newsletter by visiting http://www.yourfreecreditreportnow.com.

limousine chicago service
In The News:

Saving Money: Quick Cash, High Cost

I didn't think it was possible. But it is. Folks,... Read More

Learning the Disturbing Facts about Credit Card Debt

When I received my first credit card in the mail... Read More

Useful Tips On Avoiding Credit and Charge Card Fraud

Credit and charge card fraud costs cardholders and issuers hundreds... Read More

Free Credit Report - Really

2005 marks the year that consumers will be able to... Read More

Ten Steps To Building A Good Credit History

Are you thinking of buying a house? Do you want... Read More

Choosing The Best Credit Card To Apply For

Always shop around to get the best deal when choosing... Read More

Secured Credit Cards- Consumer Tips

Whether you have no credit or damaged credit, secured credit... Read More

Building Good Business Credit After Bad Credit

Can you establish good business credit if you have bad... Read More

Warning: Free Credit Report Imposter Websites Springing Up on the Web

A recent amendment to the federal Fair Credit Reporting Act... Read More

Recognizing the Signs that You Might Need Credit Counseling

Most families in America today have a credit card; some... Read More

How to Avoid Credit Card Late Fees

Everyone hates late fees and being late will cost you... Read More

Easing Your Financial Burdens With Credit Counseling

It is a well-publicized fact that more of us are... Read More

Understanding the Function of Credit

What is Credit?Credit is the backbone and the engine behind... Read More

3 Free Credit Reports For You

If you were to tell someone that they can have... Read More

Credit Cards For People With Bad Credit Scores

Sometimes life lands you in a situation that causes your... Read More

How To Survive In A Plastic World, Qualifying For Credit Card

Let's face it, having credit is no longer a choice.... Read More

What Does Your Credit Say About You?

A credit report is more than just a snapshot of... Read More

Debt Collection Agencies

Debt collection agencies are often a viable option for receiving... Read More

Free Credit Reports - How to Maintain Your Credit Profile

Maintaining your Credit ProfileEvery consumer should be maintaining their credit... Read More

Top 5 Reasons To Check Your Credit Report Regularly

#1 Make sure mistakes aren't hurting your credit.Reviewing your credit... Read More

Your Consumer Rights

If you have ever fallen behind on your debts you... Read More

New Law Provides Free Annual Credit Report

As of Thursday, December 1, 2004, one-third of Americans will... Read More

How to Deal with Hire Purchase Debt

WHAT IS HIRE PURCHASE/CONDITIONAL SALE?Although people often talk about "buying... Read More

Simplifying Your Search For a New Credit Card

Today, selecting the proper credit card can be a bit... Read More

Sound Advice For First Time Credit Card Users

If you are just entering the world of credit cards,... Read More

induction cobra head induction shoebox Pete's produce ..