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Ned
07-01-2006, 08:46 PM
Credit cards and Debit cards look alike on the surface, but are they really the same when it comes to fraud and consumer protection?

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).

Experts are consistent in their advice that you should avoid using your debit card for any online purchase or for something which is expensive, because it is much easier to dispute a charge when you use your credit card. If your credit card purchase arrives broken, for example, 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.

So, when you travel, do you use your debit card for any purchases, or do you limit your debit card to ATM cash withdrawals?

AaronK
07-01-2006, 10:41 PM
I'm in a minority. I refuse to carry a debit card. When I open an account at a bank, I tell them in plain English that I want an ATM card, not a debit card that can be used as a Credit Card. I carry two other credit cards and have no need for a third that gets deducted from my checking account.

Of course, I had one bank once that didn't seem to get the message and kept sending me (unsolicited) an "upgrade" to their gold debit card. I finally told them that if they pulled that stunt again that they would be losing a customer. Needless to say, I have yet to receive another card unsolicited.

I know, I'm in a minority.

deangreenhoe
07-02-2006, 12:05 AM
I voted credit card for many of the same reasons listed above. I do use a debit card quite frequently in my local area, but generally leave it at home when I travel. Another consideration is that even though a debit card looks and feels just like a credit card, you'll quickly learn the difference if you try to rent a car with one. Despite my warnings to the contrary, I still get occasional distress calls from clients stranded at the car rental counter because they decided to believe the debit card promotional materials (accepted EVERYWHERE Visa is) instead of me.

Not really always the case. <_<

Some hotels and resorts will also demand to put a speculative hold on a credit card against potential purchases and the expected final bill and those will be rejected by debit card issuers as well.

If someone doesn't trust themselves on holiday with credit, or just doesn't want to face the big bill when they get home, I suggest they purchase the prepaid Visa cards in modest increments and just use those for general purchases and expenses. They are much easier to use than travelers checks these days. However, if you are not packing credit also, you could hit some real snags on the road.

agentplus
07-02-2006, 04:01 AM
I agree. I carry a Credit Card with a high maximum and an ATM/Debit card. The ATM/Debit card had a $1500 per day maximum when I got it. I changed that to $100 per day maximum (can you imagine withdrawing $1500 per DAY from a checking account with no PIN?) I did have to go to the bank and sign a paper for that change.

The Credit Card is for purchases and expenses; the ATM is for cash and the Debit card is my back up.

BPoland
07-02-2006, 04:44 AM
I carry both when traveling :) I use the credit card for hotel/car etc. and use the debit card to get cash when I arrive and any time I need more cash during the trip. When going out of the country, I do the same. Hit the ATM for local currency right after customs in most airports ;)

Kairho
07-02-2006, 06:55 AM
I'm another one who avoids debit cards completely. Too dangerous -- without any benefits.

For quick cash at ATMs when on a trip I carry my ATM card. But good ol' Amex is prime (with a Visa or MC as a reluctant backup).

tdew
07-02-2006, 07:50 AM
Like others have already said - the Debit card as an atm for cash and walking around money in local currency and the credit card to pay for anything larger.
I also have a few leftover $100 traveler's checks from American Express that have lived hidden in my wallet and other spots for a number of years as an emergency fund. I know they aren't doing me any good financially, but they do wonders for my peace of mind because I don't spend them - but know that I'm not ever completely broke.

SteveCMI
07-02-2006, 03:53 PM
Originally posted by AaronK@Jul 1 2006, 10:41 PM
I'm in a minority. I refuse to carry a debit card. When I open an account at a bank, I tell them in plain English that I want an ATM card, not a debit card that can be used as a Credit Card. I carry two other credit cards and have no need for a third that gets deducted from my checking account.

Of course, I had one bank once that didn't seem to get the message and kept sending me (unsolicited) an "upgrade" to their gold debit card. I finally told them that if they pulled that stunt again that they would be losing a customer. Needless to say, I have yet to receive another card unsolicited.

I know, I'm in a minority.
30462



You are not alone. I work in the industry and have yet to see the consumer benefit of a debit card. Why does anyone want to give away their cash for free much less all the other protections and benefits of using a credit card. I personally put everything that I possibly can on plastic then use online bill pay to schedule the payments the day before they are due. I do not carry balances. I have a branded ATM card (Visa) so that it can be used for ATM withdrawals world-wide. .

AaronK
07-02-2006, 04:24 PM
Originally posted by SteveCMI@Jul 2 2006, 03:53 PM
You are not alone.* I work in the industry and have yet to see the consumer benefit of a debit card.* Why does anyone want to give away their cash for free much less all the other protections and benefits of using a credit card.* I personally put everything that I possibly can on plastic then use online bill pay to schedule the payments the day before they are due.* I do not carry balances.* I have a branded ATM card (Visa) so that it can be used for ATM withdrawals world-wide.* .
30486


You have the card I refuse to carry. I refuse to carry a branded ATM card. Thats the fight I usually have with the banks.

Ned
07-02-2006, 04:27 PM
Originally posted by SteveCMI@Jul 2 2006, 04:53 PM
You are not alone.* I work in the industry and have yet to see the consumer benefit of a debit card.* Why does anyone want to give away their cash for free much less all the other protections and benefits of using a credit card.* I personally put everything that I possibly can on plastic then use online bill pay to schedule the payments the day before they are due.* I do not carry balances.* I have a branded ATM card (Visa) so that it can be used for ATM withdrawals world-wide.* .
30486

Steve, I think there are a lot of people out there who totally agree. I too never use my ATM card as a debit card. I never make any purchases with it whatsoever. It's a Visa, so I can use it worldwide in ATMs. I barely use checks these days. I'm now down to 3 checks a month or less. I use my credit cards for every purchase I can possibly make with them, and then pay online as well. My credit cards garner points which I regularly use for travel.

john225
07-02-2006, 04:47 PM
Don't know what banks you all use, but my bank (Chase) offers all the same protections and reward points on my Visa branded check card as they do on their pure credit cards.

I also get an immediate e-mail anytime a transaction is made on my check card. I can go to the grocery store and use my card, and by the time I get home, I have the e-mail from them advising of the transaction.

Had my card stolen about 2 years ago, and it was used. As soon as I called them, about 4 days after it was stolen (I didn't notice right away, I was in the hospital, and it was stolen out of my wallet while I was out of the room for tests) they credited back the money to my account for my use while it was in dispute, and within a week I was notified that the matter was settled, and I was out nothing.

bravestar
07-03-2006, 08:38 AM
I am not sure what people have against debit cards. I use mine like a credit card, and NEVER use my PIN for purchases - ATM only. I also have a standard credit card that is used only for emergencies - I don't like to spend money I don't have, so using a debit card allows me to keep my spending in check.

trvlgirl
07-03-2006, 08:42 AM
I have to agree John225. I use my debit card all the time and have never had a problem. My bank gives me the same protection as their credit card. I use cash or I have used a pre-paid Visa if I'm going on a trip. I have rented cars, gone on cruises, and travel overseas with no problems. We live in a country where it is ok to be in debit and I don't want to live that way. I understand alot of you pay off your card when the bill comes in and that is great. I just believe in paying for it as I go. I follow the Dave Ramsey plan. Living debit free.

Sorry, I will get off my soap box now.

stephen_s
07-03-2006, 09:10 AM
I won't use my debit card as a debit card because my bank charges me a transaction fee. If I really want to use it, I have them use it as a credit card.

Ned
07-03-2006, 09:26 AM
Originally posted by trvlgirl@Jul 3 2006, 09:42 AM
...I understand alot of you pay off your card when the bill comes in and that is great.* I just believe in paying for it as I go.* I follow the Dave Ramsey plan.* Living debit free...
30503

I don't believe in casual debt. My wife and I did have a mortgage on our house (paid off) and do have an auto loan (year to go), but we pay our credit card bills in full each month.

My problem with the debit card is that protection for purchases isn't the same as for credit cards. This isn't just me saying this, but financial experts who strongly suggest that beyond the typical cash and carry purchases at the gas station or supermarket, you're better off eschewing the debit card and use a credit card. I've read articles about debit vs. credit cards in Money, the Wall Street Journal and other financial publications, and they all agree on this.

Here's an example, I ordered an expensive camera lens and then cancelled the order. The company shipped it anyway. I tried contacting them, and they ignored me. I then went through the credit card company and got an immediate temporary credit while they investigated. The store ignore them too, but the credit card company then permanently credited my account and charged them back when I sent them a copy of the paperwork including the company's acknowledgement of the order cancellation. Finally the company sent me a label to send back the lens. I don't need a credit from them, because I already have it. Without the credit card company I would still be stuck with the lens and out the money.

A friend of mine bought a camera with his debit card. He didn't get the one he ordered. The merchant to the camera back, but they only gave him a store credit. That isn't exactly putting money back in his account, and they no longer have the camera he wanted. If that had been a credit card purchase, he would have gotten a credit back to his credit card account. The bank said since the store gave him a full credit, that's all they had to do. Visa and Mastercard Debit Cards have a zero liability policy, however, a store credit suffices under that policy.

I'll stick with purchasing through credit cards alone, and keep up the discipline to pay the card off each month.

john225
07-03-2006, 09:53 AM
Ned, that may be with your bank, but with my bank, my check card has the same exact protections as their credit cards. $50.00 max liability on unauthorized charges, extra warranty protection, every thing that comes on a Chase Visa or MasterCard.

I have also read articles on credit vs. debit, and they generalize the differences. They don't look at individual banks and their policies, so I can't agree with the blanket statement that all credit cards are better than all debit/check cards, because it is not always the case.

I also like my check card much better because if I don't have the money at that exact moment, I cannot get the item. I then don't have to worry about a bill coming in. Anything purchased on the check card is already paid for. No annual fees or possible interest charges in the event that the bill cannot be paid in full.

cole75
07-03-2006, 10:59 AM
Our debit cards do not work as a credit card here in Canada.. so I voted both.

Nicole

deangreenhoe
07-03-2006, 12:14 PM
I have rented cars, gone on cruises, and travel overseas with no problems.

I just wanted to quick clarify this so unwary travelers do not get stuck.

Some car rental companies accept debit cards for car rentals in limited locations, as long as you have enough cash in the bank for the amount they hold as security deposit. That money is not available for you to use otherwise until the car is returned. The same goes for hotel/resort holds.

Most importantly, if you are planning on renting a car with only a debit card, you really need to check the policy for both the car rental company and the specific location. If you've always breezed through in the past without incident, you just lucked out. :)

Nicole, not all debit cards in the U.S. work as credit also. It depends on the issuing bank and there are various programs. One of mine does and the other does not.

Ned
07-03-2006, 01:01 PM
John, you're certainly right that all credit and debit cards are not created equally. One of the reasons I like my two main credit cards is the points I get for travel. I use the points all the time. They've proved very valuable to me.

john225
07-03-2006, 03:20 PM
That's another reason I like my Chase check card. I get points for everything I spend that can be converted to FF miles on various ailrines.

Ned
07-03-2006, 04:12 PM
Originally posted by john225@Jul 3 2006, 04:20 PM
That's another reason I like my Chase check card.* I get points for everything I spend that can be converted to FF miles on various ailrines.
30583

That's good to know. I'm going to take a look at that card based on your description.

gamsmmtl
07-06-2006, 09:11 AM
I don't bring traveller check's anymore.
I use rather debit card to withdraw local currencies (I have a bank plan which included transactions fee in several networks like :CIRRUS, INTERAC, etc...)
so I don't have to exchange money.
Even if there is a transaction fee, this fee is cheaper than you pay for currencies or Travellers check's exchange.

I use Credits for Airline, Hotel, Car-rent and Entertainment (Mileage earning).
For Airline tickets, It's a must to stick to Credit Cards because incase of bankkrupcy of the Airlines, the charge will be refunded.

Gesualdo
07-06-2006, 11:05 AM
Originally posted by deangreenhoe@Jul 3 2006, 12:14 PM
I just wanted to quick clarify this so unwary travelers do not get stuck.

Some car rental companies accept debit cards for car rentals in limited locations, as long as you have enough cash in the bank for the amount they hold as security deposit. That money is not available for you to use otherwise until the car is returned.* The same goes for hotel/resort holds.*

30529


I think that was the original point regarding those who try to rent with debit cards. They get surprised not by the fact that debit cards are not accepted (because they usually are), but that the company has to place a funds hold on a significant amount of money in these people's bank accounts. That's fine if you regularly keep that much money in your account, but what if you live paycheck to paycheck and suddenly find yourself having to attend a funeral 900 miles from home? Even if you have an extra $1000 lying around for this purpose, can you afford to let go of it for the time it takes to rent the car, return it, and wait for the car rental company to get around to letting go of your money? Sometimes it takes a few days. I say thank goodness this option is available to those who can't have credit cards for one reason or another, but I think I'll stick with credit. Travel is hard enough without adding an extra hassle.

mtp51
07-06-2006, 11:10 AM
I use both

stonetab
07-06-2006, 11:10 AM
Like many of the others who have replied, I carry an ATM only card to get cash and credit cards for purchases.

While many debit cards state they offer the same dollar value of protection against fraudulent charges to lost or stolen cards, the money involved in a debit transaction immediately leaves your account. You may not notice the loss until you find your checks are bouncing because your account has been emptied.

Also, if there's a disputed item on a debit transaction, the bank has already taken the money out of your account. While they may replace the money within a few days, if they later investigate and disagree with your allegations, they can just take the money from your account again.

A credit card issuer, on the other hand, can tell you that you still owe the money if they dispute your claim regarding fraud or a purchase problem, but you still have the money in your bank account. You're in a better position to try again to get them to work with you on a dispute when they want money from you than in the case of a bank that already has your money.

Arizona Road Warrior
07-06-2006, 03:33 PM
Originally posted by AaronK@Jul 1 2006, 07:41 PM
I'm in a minority. I refuse to carry a debit card. When I open an account at a bank, I tell them in plain English that I want an ATM card, not a debit card that can be used as a Credit Card. I carry two other credit cards and have no need for a third that gets deducted from my checking account.

Of course, I had one bank once that didn't seem to get the message and kept sending me (unsolicited) an "upgrade" to their gold debit card. I finally told them that if they pulled that stunt again that they would be losing a customer. Needless to say, I have yet to receive another card unsolicited.

I know, I'm in a minority.
30462


My wife and I don't have debit cards for two reasons: 1) we use our affinity credit cards to generates mileage and points. We are disciplined enough to not overspend and we paid our credit card bills in full every month. 2) It can make it difficult on balancing the ‘physical’ checkbook with the ‘electronic’ checkbook.

We might be in the minority but there could be more of us than what we think.

bodega
07-06-2006, 04:06 PM
I always recommend to clients that they take more than one card with them on vacation. A credit card is more readily accepted at rental car counters and hotels than debit cards due to the hold that needs to be placed on them. I have had clients lose a card, had a machine damage a card and had client have their card used fraudulantly while they were on vacation, eating up their available credit.

When traveling out of the country, we use one card for hotels, one for cars and one for purchases. This has been helpful for tracking fraudalant usage, which happend to us last fall in Costa Rica. Out of the country, we try to use local currency for smaller purchases. We do not have a debit card or use ATM's.

With regards to using a credit card for travel purchases, that is the best way to go. Credit card companies offer a lot of benefits and protection when it come to travel.

candyharrington
07-06-2006, 09:43 PM
Total credit all the way. And I pay off Amex and Visa every month. I just happen to like their end of year record keeping/statement for taxes and of course I enter all the biz expenses into my financial program. Plus I get FF miles on my chase Visa and my AMEX card. I also carry a small amount of cash, maybe $150 in small bills for tips. No matter where you are, they will take US dollars for that purpose. And I do have an ATM card, which I save (carry with me) for emergencies. I'm pretty much a plastic traveler. And I'm a frequent and far flung traveler and I have to say I've never really had a problem.

IMHO Travelers checks are a big PITA. No real need for them at all. Not in this day and age. I used to use them 20-some years ago, but not today.

Candy

BarkingLeopard
07-07-2006, 04:45 PM
I refuse to use cash anymore, unless a merchant offers a discount for it. This is even around town when I'm not traveling.

I've written something like 4 checks in the past year. Too much hassle, too much cost. It's easier to pay my bills online.

I use a single credit card because it creates a paper trail, and when I update my budget with my expenses for the month I can easily go online to my bank's website and make sure that I included all the expenses. I also like the fact that (as others have mentioned here) the credit card helps me improve my cash flow...

My HSBC savings account yields 5.05% at the moment, better than many CDs, so by paying my bills up to six weeks after I generate them (buy big-ticket items at the beginning of the month, pay two weeks after the end of the month when the bill comes due) I'm able to keep the 0%-interest-rate-checking-account balance low enough to squeeze out some extra cash from the interest at HSBC. You do the math on how much money this has the potential to save.

I've never had a balance on the credit card, and neither has my mother. We are both quite proud of it.

I have a debit card but rarely use it, largely for the reasons stated by other Trisoites.

I like my bank branch (spacious and new) and visit it instead of an ATM most of the time.

Like Ned, I've had to dispute a credit card purchase after problems with a camera purchase (never buy anything from TriState Camera/Computer in the NY/NJ/CT area or online, by the way). It was so reassuring to dump the mess into Bank of America's lap, instead of being left to fend for myself. I noticed that after receiving extremely poor service for weeks I got a very kiss-@$$ phone call from the merchant a few days after I filed the dispute.

One thing I HATE is how PayPal tries to get you to use your debit card for eBay purchases instead of your credit card, presumably to let it pay lower fees. I don't trust or adequately understand PayPal's "Protection" plan, and view it as much less reliable than my credit card's protection. When I'm buying something off of eBay, I want to be able to dispute it with the seller AND PayPal AND my credit card company, so that I have three layers of protection, thank you very much.

And there's my book. B)

Ned
07-07-2006, 06:03 PM
Originally posted by BarkingLeopard@Jul 7 2006, 05:45 PM
...Like Ned, I've had to dispute a credit card purchase after problems with a camera purchase (never buy anything from TriState Camera/Computer in the NY/NJ/CT area or online, by the way)...

...One thing I HATE is how PayPal tries to get you to use your debit card for eBay purchases instead of your credit card...
30905

You are not the only person I have heard complaints from concerning TriState Camera. Personally I wouldn't touch them.

I also don't trust eBay. I have written before on Tripso, for example, how eBay's Second Chance System promotes dealer cheating (http://www.tripso.com/forums/index.php?showtopic=6225&view=findpost&p=24259) .

silver cloud
07-13-2006, 07:48 AM
I usually ONLY use my debit card. I just up my daily limit for the month I'm traveling and pop my hard earned cash in that account about three days prior to leaving.

I'm trying NOT to use credit so it works out well for me. Oh sure there are times that I've had to use a credit card but I try not to.

:) mar

BarkingLeopard
07-13-2006, 09:55 PM
Originally posted by Ned@Jul 7 2006, 07:03 PM
I also don't trust eBay.* I have written before on Tripso, for example, how eBay's Second Chance System promotes dealer cheating (http://www.tripso.com/forums/index.php?showtopic=6225&view=findpost&p=24259) .
30913


Yeah Ned, I lost $15 on S&H because TriState shipped a product that they claimed they didn't have in stock (and REFUSED to refund the S&H when I brought up the discrepancy- wouldn't have even refunded the product cost if I hadn't filed a credit card claim), go figure, but I won't get into that, because doing so would involve a few choice words and threats that you'd have to edit out anyway.

As far as eBay goes, I think you make a valid point about that irregularity, from what little I know of it (I've done all of 2 or 3 transactions at this point, so I guess I'm a complete newb).

My strategy on eBay so far, assuming that I'm bidding on an item that's relisted by the same seller over and over, is to be patient and just place lowball bids on a few auctions (none of which are on at the same time, mind you) to get an idea of the price range for the item. As long as I vary my max bids somewhat (up and down) and as long as I watch, say, a half-dozen auctions to see that the same shill bidders aren't winning or involved multiple times, wouldn't this substantially reduce the risk of being taken by the trick that you described?

I agree that (economically speaking) eBay will only police its sales to the minimum extent that is necessary to keep public trust and to prevent scandal; policing its sales beyond that will only add expenses and reduce revenue. I agree that eBay and PayPal cannot be counted on to help consumers.

Another concern of my is retaliatory negative feedback (you give a legit negative feedback to someone and get a non-legit negative feedback in return) and (similarly) sellers whose computer systems automatically give you a positive feedback only after you give them one. That gets into some game theory and quid pro quos that I really don't want to think about, and in my mind very substantially erodes the value (and purpose) of the feedback system.

To conclude, thanks for the info, but I feel that as long as I can reap substantial savings after researching an item thoroughly, given my risk tolerance it's still worth buying low-value items (say, under $50) and paying for them with my credit card. I'm not about to be the idiot buying a car sight unseen on eBay...but I do have a Brooklyn Bridge to sell you for scrap iron if you'd like it. :lol:

Ned
07-13-2006, 11:23 PM
Originally posted by BarkingLeopard@Jul 13 2006, 10:55 PM
...but I do have a Brooklyn Bridge to sell you for scrap iron if you'd like it. :lol:
31469

I think I'll pass it up. We've got too much junk in the attic already.

tdew
07-14-2006, 06:30 AM
You know, I never thought it would happen, but we DID buy a car on ebay last year.
My son did the research and found the car he really, really wanted.
After checking it out thoroughly with CarFax we decided to go ahead and buy it.
He and I flew down to FL and drove it back to NJ. That was a good test of how it behaved while it was still covered by a money back guarantee.
It has turned out to be a great car...