All About Debit (Credit) Cards

Are you riding the so-called debit card wave? If so, you're one of a growing number of consumers who like the ease and convenience of debit cards.

But do you understand debit cards, what they can and can't do, and how to protect yourself if your card is lost, stolen or misused? Here's what savvy debit cardholders need to know about their cards.

You're in Good Company

Today more than 60 million people have debit cards that carry the logos of the two major payment card companies. That number is expected to grow dramatically as debit cards become increasingly popular.

What's Not Smart

Many debit cardholders confuse debit cards with standard ATM cards. Like most Americans, you may not be aware of what your debit card can do for you and what you must do to protect yourself if your wallet is lost or stolen.

What's more, less than half of all Americans can name every item in their wallet without looking, and only 12% keep a written list of their wallet's contents. That's not smart.

So Smarten Up!

Really get to know your card: what it is, what it does and can do, what you must do to protect your debit card and everything else that's in your wallet. Then print the Wallet Watcher, fill it out and put it in a safe, separate place. That's smart.

Know Your Debit Card...

Not all debit cards are equal. Debit cards with the logo of one of the two major payment card companies are ATM cards with clout. They can be used to obtain cash from ATM machines, and also to make purchases anywhere the logos on these cards are accepted -- over 14 million merchants worldwide.

Increasingly, debit cards combine the key elements of ATM cards, credit cards and checks-- instant access to cash, worldwide acceptance, and the funds come directly out of your checking account. And because purchases and ATM withdrawals are listed on your monthly statement you can track your spending. Very Smart!

Other debit card facts: In some cases, you can use your debit card with a Personal Identification Number (PIN) at places like the supermarket checkout to get cash back above the purchase amount.

Most don't, but some issuers do charge fees for making purchases with your debit card. Be sure to check with your issuer and shop around for the best deal.

Debit cards are typically used as substitutes for cash and checks to pay for everyday items such as gasoline, groceries, restaurant meals, and department store purchases. You don't have to carry cash or checks and, unless you dip into an overdraft line of credit tied to your checking account you don't run up interest charges.

Look After Your Debit Card...

And your debit card will be good to you. You're in the driver's seat should your card be lost or stolen. If you notice your debit card missing, notify your card issuer immediately.

The two major payment card companies limit your liability to a maximum of $50 and it could be as low as zero if you report your card missing immediately. But, it's up to you to safeguard your debit card and notify the issuer as soon as you discover it missing.

It all depends on you. That's where the Wallet Watcher can really help. Fill it out and put it in a safe place outside your wallet. Then, if your debit or credit cards are lost or stolen, you'll have everything you need to report and replace them.

Your debit card may be safe in your wallet but unauthorized use can still occur. Check your statements. Use the Wallet Watcher to report problems to the issuer immediately and avoid hassles when you legitimately use your card.

Source: The U.S. Consumer Information Center