Debit cards

[poundwise]

Re: Debit cards


Here is an article that is not anti-debit card yet still points out the added risk and other factors:

http://www.usatoday.com/money/perfi/columnist/block/2005-05-09-debit-cards_x.htm

[Elgin526]

Re: Debit cards

Well, the way I read the article, debit cards are not a good thing. You have much more protection if you use a credit card. I am like one of the other posters, I prefer to use cash or write a check.

Don't think you are safe writing checks, a theif can steal your identity from info on you check! Your name, name of your bank, address, account number, bank routing number and your signature are all on it! That's why I never mail checks from my home mail box, anyone can steal my outgoing mail (and this HAS happened to people). I put it in a USPS corner box in my neighborhood instead. And I never write a check at a store for the same reason, if I want to pay "cash" I use my debit card (with a Master Card logo) or I use my rewards credit card.

I'm not saying you should run out and get a debit card, of course! I just want to make you aware that writing checks can still put your money and identity at risk if the wrong person gets a hold of one.

[vsjhoc]

Re: Debit cards

I use the same physical card as both debit and credit. As debit hits it hits immediately, and credit doesn't always. I can then enter my PIN or sign.

OK, let me know if I've got this right (I'm a little slow sometimes): You have a checking account and you have a credit card account. You have one actual card for both. When you use it as a debit card, it deducts the money from your checking account. When you use it as a charge card, it posts to your credit card account. Are you always asked (by the clerk or the machine) whether it is a credit or debit transaction? What happens (how is it processed) when they don't ask?

I have only a debit card. Most times I input the pin, but sometimes I am asked to sign. By signing, I am not turning it into a credit transaction. So how is the distinction made when you use your dual-purpose card?

It is so rare now for merchants to even look to see if your card is signed, never mind compare your signature to another ID. I've got "check ID" written on the back, but that's seldom done as well.

[Broken Arrow]

Re: Debit cards

Well, I have a Visa check card. It can be used either as a debit or credit. Both are tied only to my checking account. When I make a debit, it's charged immediately. As in *poof* right now.

In the event that they can't take debit for some reason (almost unheard of nowdays unless the merchant's machines go down), I can also charge it as a credit. For that, it goes through Visa's credit processing... process. Whatever that is. From the end user point of view, it won't post as quickly. It's also is NOT reported to a credit bureau (or so I am told).

So, whatever technology is involved in using debit is apparently more complicated than using it as a credit. Remember those paper and carbon copy slips that they run through with your credit card? Yeah, for the merchant, charging credit can be fairly low tech if need be; something that just isn't possible with debit when the all-powerful Wizard of financial OZ is out on vacation....

[poundwise]

Re: Debit cards


There is some mix-up in terminology.

A debit card issued by your bank that is tied to your checking account is a DEBIT card, PERIOD.

If you perform a PIN-based transaction (sometimes called ATM or debit transaction) then the money is DEBITED from your checking account.

If you perform a signature-based transaction (running your debit card as a credit, which is possible due to the connectivity to VISA/MC) then the money is still DEBITED from your checking account.

The card is a debit card either way. It is your choice (most of the time) whether to run it in such a way as to require a PIN or a signature. Some merchants have started preferring that you use a PIN. This saves them some money in fees for processing the payment. If your bank offers a debit card rewards program, they will likely only credit rewards/points for transactions requiring a signature.

If you have a plain ATM card (a bank issued card tied to your bank account that enables you to access your money using a PIN but that does not have a VISA or MC logo) then you, in fact, have a debit card. You can withdraw money from ATM machines and perform purchase transactions using your PIN.

In this sense then, what is commonly called a debit card is really a hybrid. It has the features of a ATM/debit card combined with the ability to be used as a credit card would be used, only with money still being debited from your bank account.

Thus, it may be properly broken down this way:

1) A plain card (no VISA/MC logo) issued by the bank (as discussed above) is an ATM/debit card

2) A card issued by the bank with a VISA/MC logo is a "Visa Debit Card" or "Visa Check Card" -- it has the features of the ATM/debit plus the ability to be used as a credit card for transactions

It should be noted that most credit cards can also be used as ATM/debit cards to attain cash advances, etc. But, let's not add to the confusion.

[poundwise]

Re: Debit cards


There is/has been some mix-up in terminology.

A debit card issued by your bank that is tied to your checking account is a DEBIT card, PERIOD.

If you perform a PIN-based transaction (sometimes called ATM or debit transaction) then the money is DEBITED from your checking account.

If you perform a signature-based transaction (running your debit card as a credit, which is possible due to the connectivity to VISA/MC) then the money is still DEBITED from your checking account.

The card is a debit card either way. It is your choice (most of the time) whether to run it in such a way as to require a PIN or a signature. Some merchants have started preferring that you use a PIN. This saves them some money in fees for processing the payment. If your bank offers a debit card rewards program, they will likely only credit rewards/points for transactions requiring a signature.

If you have a plain ATM card (a bank issued card tied to your bank account that enables you to access your money using a PIN but that does not have a VISA or MC logo) then you, in fact, still have a debit card; just not a 'Visa Debit Card' or otherwise one with the ability to perform credit card type transactions. You can withdraw money from ATM machines and perform purchase transactions using your PIN.

In this sense then, what is commonly called a debit card is really a hybrid. It has the features of a ATM/debit card combined with the ability to be used as a credit card for transactions, only with money still being debited from your bank account.

[vsjhoc]

Re: Debit cards

So despite other posts to the contrary, I had it right the first time, yes? When you are asked "debit or credit?":

1. You answer based on whether you are presenting a debit card for immediate withdrawal, or a credit card to charge your purchase; OR

2. You answer based on how you are directing them to process your debit card, either for immediate withdrawal or not-quite-so-immediate withdrawal from your linked checking account.

Please tell me I've got it right and I'll shut up and get back to work ...

[poundwise]

Re: Debit cards


Exactly.

When you are asked, "Debit or credit," ff you are using a credit card, you respond 'credit' - obviously.

If you are using a debit card, the question, as you view it, isn't so much, "Are you using a debit card or a credit card?" but rather, "Do you want to perform this transaction with a PIN (debit) or through VISA (credit)?"

[Broken Arrow]

Re: Debit cards

Yeah, I hope I didn't complicate things if I seemed like I implied that some kind of credit is involved. With a debit card, only the process of transaction differs, but no credit of any kind is involved.

[lrjohnson]

Re: Debit cards

I think they are not asking you if you "want" debit or credit. The store is asking you whether you have a debit card or a credit card, because they process them differently. I don't think the same card can function as either a debit or a credit card.

So despite other posts to the contrary, I had it right the first time, yes?
1. You answer based on whether you are presenting a debit card for immediate withdrawal, or a credit card to charge your purchase; OR

2. You answer based on how you are directing them to process your debit card, either for immediate withdrawal or not-quite-so-immediate withdrawal from your linked checking account.

Your addition of item 2 significantly alters your original statement, so yes you have it right but I don't know about "the first time."

Or you and I may be one of those pairings that say the same things so very differently that we can't see we agree.

[vsjhoc]

Re: Debit cards

Or you and I may be one of those pairings that say the same things so very differently that we can't see we agree.

Let's agree to agree.

[tener]

Re: Debit cards

i haven't got any qualms with debt cards, i preffer them because you spend what you have, not worrying about when and how you'll pay it back.

[Ima saver]

Re: Debit cards

I am sorry, but I just don't like them. I have four or five checking accounts and it is hard to keep track of the balances in all of them.

[abowers]

Re: Debit cards

Some places -- not sure if this is just in NJ -- don't even require you to sign if the purchase is under $20 with a debit card!!

But anyway, I would notice the card missing from my wallet the same day most likely. I like my debit card, because I can track my spending, whereas if I kept a wad of cash in my wallet it might disappear more quickly that I'd like it to. My debit card is linked to one checking account, which usually only has a couple hundred dollars in it --- most of my money is in an online money market savings account, not linked to any card.

I'm a little surprised people are listing the advantages of using a credit card here, given the nature of the forum. I don't care if I get rewards, because I'm using my debit card - it's my own cash. I'm not racking up debt at 10.99% (or worse), and I'm not spending money I don't have. My debit card has a credit card logo, and it has the 3 digit security code on the back. I'm perfectly comfortable using it online at sites I trust.

I see an increase in the use of debit cards as a good thing, (presumably shifting away from credit cards?) considering how much debt this country has.

[tinapbeana]

Re: Debit cards

I'm a little surprised people are listing the advantages of using a credit card here, given the nature of the forum. I don't care if I get rewards, because I'm using my debit card - it's my own cash. I'm not racking up debt at 10.99% (or worse), and I'm not spending money I don't have. My debit card has a credit card logo, and it has the 3 digit security code on the back. I'm perfectly comfortable using it online at sites I trust.

most folks on this site who are using their credit cards regularly also pay off the balance in full every month, which means a) there is no interest accrued and b) they aren't spending money they don't have. it this situation, using the credit card is exactly like spending the cash you have on hand or available via debit card (the money is still gone at the end of the month), but they receive cash back or points as a result of using the credit card.