Comments on: The Rise of Debit Cards http://toughmoneylove.com/2009/06/28/rise-debit-cards/ The Hard Truth about Money and Personal Finance Mon, 15 Mar 2010 15:37:50 +0000 http://wordpress.org/?v=2.9 hourly 1 By: AC http://toughmoneylove.com/2009/06/28/rise-debit-cards/comment-page-1/#comment-5029 AC Wed, 15 Jul 2009 14:23:26 +0000 http://toughmoneylove.com/?p=4069#comment-5029 >Some folks are concerned about using debit cards for >online transactions because in the case of a stolen >account number, an entire bank account can be wiped out. Some banks allow you to generate alias numbers for your account (or credit card) that can only be used for a certain number of transactions or for transactions with a specific merchant. This eliminates the need for (and hassle of maintaining) a separate account. >Some folks are concerned about using debit cards for
>online transactions because in the case of a stolen
>account number, an entire bank account can be wiped out.

Some banks allow you to generate alias numbers for your account (or credit card) that can only be used for a certain number of transactions or for transactions with a specific merchant. This eliminates the need for (and hassle of maintaining) a separate account.

]]> By: avery http://toughmoneylove.com/2009/06/28/rise-debit-cards/comment-page-1/#comment-4910 avery Tue, 30 Jun 2009 13:52:30 +0000 http://toughmoneylove.com/?p=4069#comment-4910 I used my debit card exclusively for smoe years (1999 - 2005), because I cut up my credit cards upon realizing I was living to service debt - I felt like a tame sheep working to grow wool that was regularly sheared. Debit only worked fine, no problems at all. Once I knew my habits were solid, my vigilance and zeal slipped and I signed up for a credit card to get an extra discount at an end of season sale when I was buying clothes for a new job. Then I signed up for another one when it gave me a deal on getting an xbox. Then another at Target. But as it turns out I never used, or even signed, the cards I acquired from the xbox transaction or from Target and the issuers eventually closed the accounts. Eventually I closed the clothing store visa and switched to a visa from my credit union where I can easily log on to transfer $ from checking to pay off the visa. Maybe I'm atypical in that I acted on what I learned from sensible personal finance types, but in a lot of ways I'm typical. Maybe the Suze Ormans and Dave Ramseys and popular types like that are having an impact on behavior. I used my debit card exclusively for smoe years (1999 – 2005), because I cut up my credit cards upon realizing I was living to service debt – I felt like a tame sheep working to grow wool that was regularly sheared. Debit only worked fine, no problems at all. Once I knew my habits were solid, my vigilance and zeal slipped and I signed up for a credit card to get an extra discount at an end of season sale when I was buying clothes for a new job. Then I signed up for another one when it gave me a deal on getting an xbox. Then another at Target. But as it turns out I never used, or even signed, the cards I acquired from the xbox transaction or from Target and the issuers eventually closed the accounts. Eventually I closed the clothing store visa and switched to a visa from my credit union where I can easily log on to transfer $ from checking to pay off the visa.
Maybe I’m atypical in that I acted on what I learned from sensible personal finance types, but in a lot of ways I’m typical. Maybe the Suze Ormans and Dave Ramseys and popular types like that are having an impact on behavior.

]]> By: kitty http://toughmoneylove.com/2009/06/28/rise-debit-cards/comment-page-1/#comment-4892 kitty Sun, 28 Jun 2009 20:22:12 +0000 http://toughmoneylove.com/?p=4069#comment-4892 The main difference between the debit cards and credit cards in terms of fraud protection is that regardless of how good your bank is, the moment you (or someone else) swipes the card, the money is taken from your account. By the time you notice - even if you call often to check your balance - your account may be wiped out and a bunch of good checks will bounce. Sure, you can get the money back - after the investigation, and you may even get your overdraft fees back, but then you'll have to call all the people whose check bounced and get them to waive the fees as well. With credit cards, you have a chance to notice the fraud before any money left your bank account. Even if you use automatic payment of the full balance, you still see the bill before the money is taken. While the fraud is investigated, the money itself is "in limbo", and you still have all the money on your account. Additionally, with credit cards you can dispute the charge if the merchant failed to deliver, for example. Can you do this with debit cards? Maybe, but you are still doing it after the fact. Really, I don't see any advantage for debit cards at all. Maybe for shop-aholics. Still, one can always use this very convenient feature of credit cards for automatic payment of the full balance. Psychologically, I fail to see any difference between debit cards and credit cards with automatic payment: in both cases you know the money will be taken from your bank account. The only difference is this moment vs end of the month. The main difference between the debit cards and credit cards in terms of fraud protection is that regardless of how good your bank is, the moment you (or someone else) swipes the card, the money is taken from your account. By the time you notice – even if you call often to check your balance – your account may be wiped out and a bunch of good checks will bounce. Sure, you can get the money back – after the investigation, and you may even get your overdraft fees back, but then you’ll have to call all the people whose check bounced and get them to waive the fees as well.
With credit cards, you have a chance to notice the fraud before any money left your bank account. Even if you use automatic payment of the full balance, you still see the bill before the money is taken. While the fraud is investigated, the money itself is “in limbo”, and you still have all the money on your account.

Additionally, with credit cards you can dispute the charge if the merchant failed to deliver, for example. Can you do this with debit cards? Maybe, but you are still doing it after the fact.

Really, I don’t see any advantage for debit cards at all. Maybe for shop-aholics. Still, one can always use this very convenient feature of credit cards for automatic payment of the full balance. Psychologically, I fail to see any difference between debit cards and credit cards with automatic payment: in both cases you know the money will be taken from your bank account. The only difference is this moment vs end of the month.

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