How things have changed through the years. There was a time when you had to run your check to the bank, cash it or deposit it and then write another check to get cash out of the bank. This all had to be done before the banks closed which was about 3 pm. And if you didn't get this done by Friday afternoon you were hooped for the weekend.
Well those days are now pretty much over. No more running to the bank because most pay is now direct deposited and now pretty much everyone has a debit card which can be used at the automatic teller machines or (ATM). Today you can find these machines in your bank, grocery store and pretty much anywhere else you can think of.
When debit cards were first introduced you could easily tell what they were. They usually had the bank logo on them, your account number and your name. Today is a bit different though. Almost all debit cards look exactly like credit cards. They have credit card logos, they can be used anywhere to purchase things including on the internet
With a debit card you are using your own money to purchase items. The money being used in association with that card is your money. When you use a credit card you're using borrowed money which you agree to pay back. This money is being borrowed from the issuer of the credit card which is usually a banking institution.
Both cards look and act in the same manner but when it comes to consumer protection there are some subtle differences. If someone steals your credit card you are only responsible for the first 50 dollars of theft unless you report the card before any charges are made to it. In this case you won't be responsible for any fraudulent charges usually.
MasterCard and Visa offer zero liability protection where you won't pay any charges if someone uses your credit card to make unauthorised purchases.
In the case of a debit card the fraud protection is similar with a few exceptions. Your liability is still 50 dollars but only if you notify your financial institution with in two business days of the loss of your card. If the card isn't reported lost or stolen your liability can jump to 500 dollars. It's also important to check your bank statement regularly. Check it with more than a glance. If there are any fraudulent charges on there and there not reported within 60 days you could be held totally liable.
In many cases you can get extra protection against fraudulent use of your cards through your home owners or renters insurance. You can check this out by reading your policy or checking with your agent.
So now you're wondering which cards you should use for what. Most experts would agree that you should use your debit card for the same things you would use cash for. A good example of this is groceries. One thing to remember when using your debit card is that you must have sufficient funds in your account to cover your purchases.
When you are using a card on line it should be a credit card. In the case of using a credit card it is easier to dispute fraudulent purchases. Another thing is that if your purchase arrives broken the credit card company will remove any charges until the problem is resolved.
So in life both cards are necessary but you just have to make sure you know when to use them. Each card has a significant use and properly done. The sooner you learn how to use both cards with in your life the easier life will be.
Dale Mazurek
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