The Perils of Debit Cards

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sport
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The Perils of Debit Cards

Post by sport »

Here is another column by Plain Dealer personal finance writer Teresa Dixon Murray on The Perils of Debit Cards. Ms. Murray gives an example of what can happen with debit cards and how to avoid the worst problems.

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neurosphere
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Re: The Perils of Debit Cards

Post by neurosphere »

At one point, I had asked my bank to issue my ATM card with NO option for it to be a debit card. But then my ATM card was damaged, and when I asked for a new one I forgot to request the debit feature removed from the card.

This article reminds me to go back request replacement ATM cards for my checking accounts without the VISA logo and ability to be used as a debit card.
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livesoft
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Re: The Perils of Debit Cards

Post by livesoft »

Just because you don't use or have a debit card may not save you. Bank of America incorrectly treated a deposit made by me in person as a debit. My account was essentially frozen for 3 weeks until they corrected their mistake even though they were informed of their mistake immediately.

I have a 2nd free checking account with almost no balance at WellsFargo to which my ATM/debit card is tied. I don't have an ATM card for the main checking account. I transfer some money from main checking to secondary checking if I believe I will need to use my ATM card (usually for overseas travel) in the near future.
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Sbashore
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Re: The Perils of Debit Cards

Post by Sbashore »

livesoft wrote:Just because you don't use or have a debit card may not save you. Bank of America incorrectly treated a deposit made by me in person as a debit. My account was essentially frozen for 3 weeks until they corrected their mistake even though they were informed of their mistake immediately.

I have a 2nd free checking account with almost no balance at WellsFargo to which my ATM/debit card is tied. I don't have an ATM card for the main checking account. I transfer some money from main checking to secondary checking if I believe I will need to use my ATM card (usually for overseas travel) in the near future.
I agree. It's not just a debit card. "Mysterious" can happen. I had one such case that I never really figured out. I had two debit cards with separate numbers, linked to the same checking account compromised AND my credit card, issued by the same bank compromised all at the same time. The only thing I could think of was that the breach was at the bank, but of course they told me it couldn't have been them (tongue in cheek). The one debit card was in my wife's purse, unused for months due to her hospitalization, the other debit and my credit card was in my possession. It's a mystery to this day.
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prudent
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Re: The Perils of Debit Cards

Post by prudent »

neurosphere wrote:At one point, I had asked my bank to issue my ATM card with NO option for it to be a debit card. But then my ATM card was damaged, and when I asked for a new one I forgot to request the debit feature removed from the card.

This article reminds me to go back request replacement ATM cards for my checking accounts without the VISA logo and ability to be used as a debit card.
My bank will issue ATM-only cards on request but when it expires they automatically send a debit card, and I have to call and again request an ATM-only card. But my wife has started shopping somewhere (maybe Sam's Club?) that doesn't take Visa or Amex so she wanted a debit card. I asked if she would just pay with cash but she didn't want to fuss with making sure she had enough before hitting the store.
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Re: The Perils of Debit Cards

Post by carolc »

I am so glad that my debit card is at my local credit union and whenever I call them the call is answered by a human being.

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Re: The Perils of Debit Cards

Post by interplanetjanet »

I've described my system before, but I use three accounts for isolation and bookkeeping - one is my main account and things only go in and out of it via ACH. One is "checking" and only has checks drawn on it, and one is "debit" and is the one I carry a debit/ATM card for. When I write a check (or do a debit withdrawal) I transfer funds from the main account to checking or debit, this way I never have to worry about enough funds being available for a check and can easily tell what hasn't cleared by how far away my balance is from the "buffer" number in my checking account. Balancing my checkbook consists of me checking weekly to see what has cleared, if anything, and putting a check mark by the stubs that have and moving them past a divider in my check book - that's it.

I feel better with compartmentalized exposure like this.
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daytona084
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Re: The Perils of Debit Cards

Post by daytona084 »

My bank has "e-mail alerts" where you receive an email for various reasons, which are set up by the customer. I have an ATM card that is also a debit card, but never use it as a debit card. So I have the e-mail alert for a set up to notify me if there is a debit card transaction larger than $1.00. Once my wife used the debit card by mistake (it looks similar to the "normal" Visa credit card) and I was able to contact the merchant within minutes and have them cancel that transaction and change it to the credit card.
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neurosphere
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Re: The Perils of Debit Cards

Post by neurosphere »

daytona084 wrote:My bank has "e-mail alerts" where you receive an email for various reasons, which are set up by the customer. I have an ATM card that is also a debit card, but never use it as a debit card.
If you never use it as a debit card, you can ask the bank to remove the debit card feature. After that, it can never be used as a debit card. ATM only. In this way, if anyone ever somehow gets your PIN and clones the card, they are limited to ATM transactions, which have a daily limit for cash withdrawals, and you will be notified immediately. This limits the potential damage done.
If you have to ask "Is a Target Date fund right for me?", the answer is "Yes" (even in taxable accounts).
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frugaltype
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Re: The Perils of Debit Cards

Post by frugaltype »

carolc wrote:I am so glad that my debit card is at my local credit union and whenever I call them the call is answered by a human being.

carolc
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jimmyrules712
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Re: The Perils of Debit Cards

Post by jimmyrules712 »

carolc wrote:I am so glad that my debit card is at my local credit union and whenever I call them the call is answered by a human being.

carolc
Would your local credit union have a human being answering the phone at 2am sunday morning? One of the primary reasons I use Ally bank instead of my local credit union is because my CU does not have 24x7 phone support.
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Re: The Perils of Debit Cards

Post by MnD »

Our credit card (same bank as checking) works for checking ATM withdrawals, so our debit cards stay at home in a locked filing cabinet.
You just have to indicate "withdraw cash" - "from checking" at the ATM.

I'm not absolutely positive the credit card can't be "forced" into a debit purchase from checking mode, but the bank claims it cannot.
I suppose I should try it somewhere to confirm.
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Re: The Perils of Debit Cards

Post by Carlton »

Bank of America lets you set daily transaction limits both for ATM withdrawls and debit transactions through online banking settings. I set the ATM to $400 per day and the debit to $100 with e-mail alerts. Don't expect too much damage if someone gets ahold of the card and starts spending.
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Re: The Perils of Debit Cards

Post by Sam I Am »

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CyberBob
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Re: The Perils of Debit Cards

Post by CyberBob »

The article isn't an example of the perils of debit cards, but rather the perils of bad information from a customer no-service representative. The bank told the individual to call the business where the fraudulent charge was billed to resolve the issue themselves?!? According to the Electronic Funds Transfer Act*, which would cover debit cards, if someone makes unauthorized transactions with your debit card number, but your card is not lost, you are not liable for those transactions if you report them within 60 days of your statement being sent to you.

The bank should have handled this situation. Bad bank.


* Specifically, Electronic Fund Transfers (Regulation E)
Section 1005.6 Liability of Consumer for Unauthorized Transfers
6(b)(3) Periodic Statement; Timely Notice Not Given
2. Transfers not involving access device.
The first two tiers of liability do not apply
to unauthorized transfers from a consumer’s
account made without an access device. If,
however, the consumer fails to report such
unauthorized transfers within 60 calendar
days of the financial institution’s transmittal
of the periodic statement, the consumer may
be liable for any transfers occurring after the
close of the 60 days and before notice is
given to the institution. For example, a
consumer’s account is electronically debited
for $200 without the consumer’s
authorization and by means other than the
consumer’s access device. If the consumer
notifies the institution within 60 days of the
transmittal of the periodic statement that
shows the unauthorized transfer, the
consumer has no liability.


Federal Register link (PDF), see page 81042

Bob
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