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Once upon a time 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. However time never stands still for long and things have changed through the years so that today almost all debit cards look like credit cards. They have credit card logos, they can be used anywhere to purchase things including on the internet but although both cards look and act in the same manner but when it comes to consumer protection there are some subtle differences.

Debit Card or Credit Card - Which Do I Use?

So now as for which card to use for what type of purchase! Most experts agree that you should use your debit card for the same type of purchases you’d make as if you were using cash. Therefore, it makes more sense to use your debit card than your credit card at the supermarket or petrol station (provided you have sufficient funds to cover these purchases of course). Using your debit card to pay for purchases is convenient and fast, but it also exposes you to numerous risks.

If You Use Your Debit Card - Make Sure It Is Safe. A Look at U.S. and U.K. Issues.

Be card smart by keeping track of your debit card and monitoring your bank account at least every couple of days to look for fraud activity.

Take precautions when using your debit card, and,if your card is lost or stolen, report it immediately. You should avoid using your debit card for any online purchase or for something which is expensive.

Why? In the case of using a credit card it is easier to dispute a charge or fraudulent purchases. This has been brought about in the UK by The Consumer Credit Act of 1974 which ensures that you get valuable rights as a consumer. For those of us who prefer layman’s terms this is the law that governs personal loans and other credit agreements and is made up of numerous sections.

For example if you buy anything for between £100 and £30,000 on a credit card Section 75 comes into force. This means that when you buy something using your credit card, your contract is with both the trader and the card issuer. They have equal liability for anything that goes wrong so you can take action against either of them to get compensation.

This is really useful in situations (like the Internet) where, for example, the goods are damaged or don’t turn up, or the company goes bust. If you have paid by debit card you are not covered and it will be up to you to deal with the vendor directly to resolve any problems with a purchase.

The legislation applies even if you only make a part-purchase, for example, by using your credit card to pay a deposit on something you still have the same rights as you would do had you paid for the item in full.

Some credit cards also offer free purchase protection. If items bought with your card are lost, damaged or stolen within a specified period (usually up to 100 days from the purchase date), you can make a claim against this cover. It’s useful for fragile or high-value goods but check the small print for exclusions.

You won’t be surprised to know that card issuers don’t exactly fall over themselves to let you know about this extra protection. In fact, you might even have to fight quite hard to enforce your rights with some companies but if you know you’re in the right stick to your guns!

Incidentally in the United States you may have the right under your state law to withold payment from your credit card issuer. This is for purchases greater than $50 made in your state or within 100 miles from your home. If you dispute a payment in all cases you should refer to the card issuer and also notify them in writing. However under federal law this not does apply to purchases made by debit card. However it is worth checking with your card issuer because they may offer the same dispute right as with credit card.

Other free benefits sometimes offered by card companies include price protection where if you buy an item and then find it cheaper in a later sale, they’ll allow you to claim back the difference. The usual time limit is 60 days from the purchase date. Claims between £10 and £1,000 are usually valid, often subject to a small excess. You may also get free extended warranties, which extend manufacturer guarantees, usually for an extra year, or, alternatively, certain types of free travel insurance.

A Third Option People Don’t Know About

A third option is a prepaid card which is an easy and far safer way to manage your money making sure that you are the one who is always in the drivers seat!

The card looks like a credit or debit card but is prepaid and you are able to add additional funds without charge. You will be free from the worry of late payment fees or overspending but unlike a debit card you can use it for on line purchases. You will have all the protection of a credit card and should your details fall into the wrong hands the damage to your account will be limited. To get a prepaid card in the U.K., Click Here. To get a prepaid card in the U.S. Click Here.

Sign up to this card is easy and hassle free. As you do not need a bank account a credit check will not have to be carried out so you do not need to worry about poor credit history. You can use it to pay for whatever you want like groceries, petrol or holidays and as mentioned previously online shopping.

Steve says: Today cards are necessary part of life but you just have to make sure you know when to use them. Each card has a significant use and properly done can be to your advantage . The sooner you learn how to use them the easier life will be!

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Steve

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