Debit Cards Quickly Becoming the Plastic of Choice for Americans
Visa Inc reports that the majority of consumers are spending more money on debit cards than with credit cards now. In 2008, Visa reported that consumers spent $206 billion on Visa debit cards, which is slightly higher than the $203 billion spent using Visa credit cards during the same time period. Previously, credit card spending was higher than debit card spending and the flip flopping of preference is attributed to the recession.
Most Americans are trying to avoid creating more outstanding credit card debt, and using debit cards gives them the opportunity to do exactly that. Now that debit cards can be used everywhere credit cards are accepted, it makes sense that American’s would start making the switch.
Fraud Protections Not Created Equal Between Debit and Credit Cards
The fraud protections of credit cards are still superior over debit cards in most cases. If your credit card is stolen, by law the largest amount of money you can be responsible to pay for unauthorized transactions is $50. If your debit card is stolen, the longer it takes you to become aware of it and report it, the more you may be responsible for repaying.
Some lending institutions give their debit cards the same credit card-style fraud protection coverage. Visa says they require all banks issuing debit cards with the Visa logo on them to work with any consumer who reports fraudulent use of their debit card in the same manner as they would if it was a credit card. This means getting the money back to the consumer in a timely fashion. Some consumers think their should be government regulations involving debit card protections, but as of now there aren’t any.
Some consumers don’t use credit cards or debit cards due to security concerns. There are a number of banks who issue ATM only cards – which make it possible to withdraw cash from an ATM but these cards do not have a Visa or MasterCard logo and therefore cannot be used like a credit card at a retailer or online to make purchases. The benefit of using an ATM-only card over a debit card is that you can quickly access cash even if the banks are closed – but if someone was to steal your ATM card, they couldn’t use it to make purchases. The only way they could steal from you is if they also figured out your PIN (personal identification number) to make a cash withdrawal from the ATM.
Debit Cards are Familiar in Appearance and Functionality
Some specialists think debit cards have started gaining in popularity because they look and work almost exactly the same as a credit card. You whip it out, slide it through the payment terminal or hand it to the cashier, and you’re done. Instead of having to pay the balance back later (with interest), the debit card simply pulls your money from your bank account, and since it’s your own money- it doesn’t cost you anything extra in interest fees. Since you can only spend the money you have, you don’t have to worry about costly bills later that you can’t afford to pay.
Debit cards can be used to buy things by phone or internet just like credit cards, just by giving your card number, expiration date, and sometimes – the little three digit code on the back of the card.
However if you would like to use a charge card I would suggest Discover cards.
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