Black Friday: Debit card 'don'ts'
Filed under: Debt, Black Friday, Economizer, Credit cards
Even though the most recent consumer credit reports show credit card debt is declining, consumer's debit cards are getting quite a workout. Debit card transactions recently surpassed credit card transactions for the first time ever. Experts are forecasting debit card transactions to surge even further past their credit card siblings on Black Friday -- and caution that consumers need to be cautious when wielding their debit cards (on transactions requiring a PIN number) this holiday shopping season.
"Consumers are trying to keep their credit card balances low," Carrie Coghill Kuntz, spokeswoman for CreditFYI.com said in a press release. "So many are using debit cards."
There is a difference
It's important to understand, even if your debit/credit card has one of those cute little VISA logos plastered on the bottom right side, if you complete a transaction using your PIN (personal identification number) number, you're NOT covered under VISA's liability policy.
And those PIN-based transactions - not ones where you swipe your debit/credit card and opt to complete the transaction as a "credit" purchase - can wind up costing you a lot more than you'd expect.
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"Debit cards aren't much different from carrying cash wherever you go -- so you need to be careful," Coghill Kuntz said.
Experts do think it's best to leave your debit card at home on Black Friday. "With retailers trying to ring the register at a record rate on Black Friday, it's a good time to keep your debit card at home. On that day, and throughout the holiday season, leaving the debit card at home can save you headaches later on," she said.
But, if toting your debit card to Black Friday sales (and those throughout the entire season) is your only option, here's how you can keep it safe.
Read up on refunds
Unlike transactions made by cash or credit card, debit card (PIN-based) purchases that are returned or disputed might not be refunded immediately. That's because debit card purchases fall under Federal Reserve Board Regulation E, which makes them instantaneous transactions with third parties. "So you won't receive any money back from a mistaken transaction until after the dispute is resolved," said Coghill Kuntz. You could be stuck waiting for 10 days to get your money back.
Make sure to hang onto all receipts, too. Although it won't speed up a refund, it will make obtaining one easier.
Stay away from surfing
Paying via debit card (by using your PIN) is the equivalent of wiring the retailer cash. And if while shopping online you accidentally put too many items in your virtual basket, or hit your browser's "back" button and reload the transaction, you might be out of luck when trying to get a refund.
Act fast
If you learn your debit card has been used fraudulently, report it to your bank (or the card's issuer) immediately. Waiting longer than two business days can inflate your liability to as much as $500.
Don't bank on your bank
Unlike a credit card issuer, some banks don't monitor your spending habits. Which means if your debit card is used suspiciously or appears to be stolen, your bank won't shut down your debit card. That means the responsibility to monitor spending and suspicious behavior falls squarely on your shoulders.
Check your credit score
Scan your score and full credit report before shopping. That will ensure you're starting out the shopping season with a factual report and with the highest score possible. And give you a good starting point to detect any fraudulent activity that may occur during the holiday season.
Gina Roberts-Grey is a freelance writer specializing in consumer issues.
Reader Comments (Page 1 of 2)
11-12-2009 @ 9:40PM
Paul Murphy said...
I prefer option #2 PAY CASH FOR ALL HOLIDAY EXPENSES.
Reply
11-13-2009 @ 11:06AM
Jeanne said...
ALSO BE CAREFUL WHEN USING DEBIT CARDS ON BLACK FRIDAY BECAUSE YOUR BANK WILL SHUT DOWN YOUR CARD AFTER A CERTAIN NUMBER OF TRANSACTIONS (LIKELY 8), SO CHECK WITH YOUR BANK BEFORE YOU GO SHOPPING OR MAKE SURE TO ASK CASHIER TO RING AS CREDIT NOT DEBIT.
Reply
11-13-2009 @ 11:21PM
King David said...
Here's an idea that will also help to protect you when you're online, making payments when you buy something -- Set up a Paypal account!! Once it's verified you have an additional layer of protection -- there is NO cost for you to set it up and there is a minimal cost to the seller but you're the one that has to be concerned about your safety.
11-13-2009 @ 11:35AM
Dawg said...
Here's a revolutionary idea. Why not just pay with cash?
Reply
11-13-2009 @ 11:49AM
Natasha said...
WOW, Thanks!!!
11-13-2009 @ 12:14PM
Random said...
It's never a good idea to use a debit card for online purchases.
Consumer fraud protection for credit cards is almost always better than debit cards, and most debit cards have at least a $50 deductible for fraudulent purchases. This means if someone steals your card info from an insecure site, you are typically on the hook for at least $50 of any fraudulent purchase that person makes with your card.
Reply
11-13-2009 @ 6:41PM
Terri said...
Someone used my husband's debit card info to purchase airline tickets and book a hotel online, and we had no trouble getting the money back. I know this may not be the case with every bank, but Chase put it back in within 24 hours (pending an investigation), and we were not liable for anything. Our account was overdrawn and I was in a panic, and they took care of it better than I could have ever imagined.
11-13-2009 @ 7:36PM
Angela said...
Only at your bank perhaps. At the credit union I use for financial trasactions there is no liability. Might just be your bank. Perhaps you should check around and find a less greedy bank.
11-13-2009 @ 12:19PM
Scott said...
You are not correct about the 500 dollar liability. Goto visa.com, there is a Zero liability on debit card transactions just the same as credit card transactions. Does anyone do any research anymore or just regurgitate what they read on someone else's blogs or take what an "expert" states without validating their claims.
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11-13-2009 @ 2:33PM
Beth said...
Actually you are incorrect and this is one of the few things in this article that is correct. I have been working with card adjustments for years if you "knowingly" delay notifying your bank about fraudulent charges your liability "may" increase to $500. Whether or not that is followed will depend on the bank itself. Smaller more customer friendly banks will typically still waive that but larger banks such as Bank of America and Wells Fargo will not.
11-13-2009 @ 12:53PM
Jessica said...
i must agree w/those who say their bank DOES monitor transactions...our bank, has a daily limit of withdrawal and purchases. and a few weeks ago when my fiance and i bought a new engagement ring, they not only declined the card, the suspended all transactions for 24 hours. we were able to get the ring, after calling the bank, but every purchase afterwards, we had to call every time we tried to use it, to verify we were the ones using the card. our old bank, did the same thing. we moved from california to the east coast when fiance left military, and by the time we hit the az/nm border, the card was off because for 8 years, he'd only used it in the 3 states he'd lived in. for myself, i use the prepaid card when i have a large purchase to make, because it falls under visa's customer service, and there's no daily limit of spending. so now if we think we're going to have a hassle with a purchase, we just go to walmart, and put the money on my russell simmons prepaid card(hey, he's the ONLY one who reports to the credit bureau!!!)...good luck to all! i've got all but 4 people bought for already! i'm doing black friday shopping for myself ;)
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11-13-2009 @ 2:01PM
Jammie King said...
This is incorrect information. I work for a bank and I have NEVER had a customer have a problem disputing an item. As long as your debit card is backed by Visa or Mastercard, you get the same protection as you would a Visa or Mastercard credit card. Just make sure that the purchase is processed as a credit and you have the exact same protection without the finance charges.
My bank also has an awesome fraud department that monitors cards. There is a daily/weekly limit on debit cards, however, you can call your local branch to get that limit raised if you are to be making larger than normal purchases.
Also-Reg E states that we have to process disputes within 5 days.
Not sure why the scare tactics in this article. I feel completely safe using my debit card in all manner of business/online or in person. Much better than checks, considering you hand out the blueprint to your checking account with every check you write. If a card is compromised-dispute the items, block the card and order a new one.
Safeguard your PIN. If someone steals your card and is able to process a PINed transaction because you have written your PIN on your card, in you wallet or because you have given it to someone-then of course you share the liability. That is where the $50 comes in.
Reply
11-13-2009 @ 2:49PM
Beth said...
There are so many things wrong with this article I'm not sure where to start. I have worked in Deposit Operations for 10 years and much of this truely laughable.
Read up on refunds-You debit card is a VISA or MasterCard people, it's just attached to your checking account so you are paying immediately. Refunds on debit cards are no different than on your credit cards, there will be no more delay receiving your refund on your debit card than your credit card, generally 48 hours max for the entry to post back to your account.
Stay away from surfing-Last time I check most internet purchased items can be returned. Once you return your item, you'll receive your refund. This one should have read more along the lines of "make sure you buying from a reputable online entity and read "their" return policies. Better yet, pay attention to what you are doing online!
Act fast-One thing they got right. Read my reply to Scott.
Don't bank on your bank-This is complete BS! With the introduction of Red Flags (more consumer protection) even if your bank wasn't doing some sort of monitoring then, they are now. I work for a one branch bank now, we have excellent monitoring software and we will close your card if we feel like it's been compromised and we cannot get in touch with you.
Check your Credit Score-What the heck does this have to do with using your debit card?
Jeanne's comment is also incorrect. Bank's do not limit the number of transactions you can do per day (if we did, it certainly wouldn't be 8), but most have daily card transaction dollar limits. For example, our debit cards allow a person to use $1500/day for POS Transactions (using your card at a terminal in a store or online) and $500/day for ATM transactions (physical ATM cash withdrawals).
Reply
11-13-2009 @ 3:21PM
Ashley said...
I have to disagree with most of this article. I work for a credit union specializing in the Card Fraud Department and we monitor our member's debit card usage 24hrs a day 7days a week! If we notice anything unusual we immediately block our member's card and notify them. Debit cards are very consumer friendly. However, it all depends on how you use it. Using it as a "credit" is best because if you ever need to dispute the charge, it is much easier to do so, as a PIN based fraudulent charge can usually lead to the consumer being careless about their information which would make them 100% reliable. All it is, is common sense.
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11-13-2009 @ 6:12PM
Jerry said...
The writer of this article is selling bullcrap and needs to either go find something else to do for a living or learn to actually research topics before using up white space and scaring the crap out of everybody. What are you doing, working for credit card companies?
It took me one minute to read this tripe. I want my minute back.
Reply
11-13-2009 @ 10:27PM
Juliette said...
I just wonder how much research was done prior to releasing this article. I think some of the individuals posting comments should be consulting for articles not someone that wants to misinform the public.
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11-14-2009 @ 4:04AM
brenda said...
working for credit card companies i see trying to get us in more debt thanks for nothing
Reply
11-14-2009 @ 10:48AM
KellyAnn said...
Keep in mind that the cashier ringing you up on Black Friday may be a recently hired, hastily trained seasonal employee. Mistakes will happen. While this can all be corrected, a mistake on a credit card will not cause your house payment to bounce if it takes a couple of days for an erroneous transaction to clear from your debit card/checking account.
For surfing, purchase a prepaid Visa and use that for all of your online purchases. This way there is no exposure of your information or actual credit card.
Also, as a former retail manager for a large national chain, I can tell you that our register system would not process refunds to debit cards....we had to refund the customer in cash if they returned something purchased with a debit card.
Reply
11-14-2009 @ 11:48AM
funnychk said...
I'm with Jerry - I want my time back from reading this useless piece of crap article.
Reply
11-14-2009 @ 3:13PM
Debt Help Ca said...
Readers should do the opposite of what is advised here...
Debt Help CA
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