I did want to share this tip with you because I think it's important to know the difference between using a debit card and a credit card, especially online. Anyway, enough said, I'll just post Mary Hunt's tip here!
Using a Debit Card Online Is Dangerous to Your Wealth
Dear Mary,
I saw in a recent article that you do not like debit cards, especially for online purchases. This makes me nervous. I have a debit card that can be used as a credit card. I use it online all the time. Is my card different from the kind of debit card you mean? Why do you not like debit cards? Theresa B., e-mail
Dear Theresa,
There is no such thing as a "debit card that can be used as a credit card." Funds are withdrawn directly from your account with a debit card. When you use a credit card, you are creating a short-term debt. I'm sure that you, like millions of others, assume that your debit card is also a credit card because, when you use your card in a brick and mortar store, the merchant will ask you "debit or credit?" Merchants don't know what kind of card you have, so if they see a card with a MasterCard or Visa logo, they need to know whether you will be signing the transaction or using your PIN.
When you use your debit card but you say "credit" when the merchant asks, that means you opt for a signature-based transaction. The paperwork is processed through the merchant's bank with all of the credit transactions. It will not create a debt for you. You will not receive a statement at the end of a billing cycle where you have to make a payment to cover the purchase. The money will come directly from your account. A signature-based debit-card transaction can take two to three days for the funds to be removed from your bank account.
When you say "debit," you are asking for a PIN-based transaction. In this case, the funds are immediately removed from your account and put into the merchant's account.
Theresa, your debit card is no different than other debit card, and you are foolish to use it online. Anyone with your debit-card number could empty your bank account in a New York minute. Online, a thief needs neither your signature nor a PIN to complete a transaction. Suddenly, the money is gone and your bank account is empty. That creates a horrible hassle, including filing a police report, dealing with your bank, proving that you are not the one who drained the account and then waiting to see if you can get your money back. While some issuers are touting "hassle-free" restoration of funds, that is a marketing campaign, not a requirement by law. Those promises can disappear any time. Credit cards are regulated by a different federal law that makes the card issuer responsible in the event that card or card number is stolen. Mary Hunt
1 comment:
Wow, did not know there was no need for a PIN number online! Mike
Post a Comment