Debit cards offer a cost-effective solution for people who want to avoid card debt. Debit cards, like credit cards, offer electronic access to a world of products and services. Online shopping with debit cards online may have unforeseen consequences. When someone obtains your debit card number, along with your personal identification number (PIN), your bank account may be emptied without warning. With access to just one account, someone can steal your identity.
Function
People like debit cards because they provide a built-in spending limit. The cardholder may not spend more money than she has. Unlike a credit card with a tempting high spending limit, a debit card is self-limiting.
According to "Living With the Internet and Online Dangers," debit cards issued by a bank don't provide the same protection as credit cards. The credit cardholder is liable for just $50 of unauthorized charges before the compromise is reported. Then the cardholder isn't responsible for any other charges.
By promptly reporting the theft of a debit card --- within two days --- the debit account holder is liable for $50. If the debit cardholder doesn't report the charge in two days, he may be responsible for up to $500. If two months pass and the theft goes unnoticed and unreported, the debit cardholder may lose the right to dispute the charges.
Features
"The Total Money Makeover: A Proven Plan for Financial Fitness" points out that debit cards work like electronic checks. The checking account is debited when the approved transaction occurs. Banks often allow debit cardholders to use all available funds in their accounts --- thieves like debit cards for this reason.
Overdrafts may also occur when using a debit card. The costs of overdrafts can easily outpace interest charges assessed to a credit card account. Use of the debit card as a credit card is somewhat confusing. A debit card isn't a credit card. However, using the card number without providing PIN access is possible. Withdrawal of the funds may take an extra day, though most banks make a pending debit to the account.
Effects
Mistakes can happen when paying with a debit card online. Instead of authorizing a single purchase, the seller may make multiple authorizations. The debit card withdraws the amount authorized by each transaction. According to "Understanding the Law," until the error is reported, your spending limit is decreased by the erroneous charges.
Considerations
When using a debit card online, consider only secure shopping networks. Note that the web address says "https://": The "s" indicates security. Never send your card number in an email or fax. Make sure to use and update the security software of your home computer. Avoid using public computers for making online purchases.
Prevention/Solution
Google Checkout provides a secure checkout process for debit cardholders online. The service allows buyers to purchase goods or services from almost any Internet site.
PayPal also protects debit, credit or bank account information when settling eBay auctions and other Internet purchases. The company offers several protective services, including Bill Me Later, Security Key and virtual debit cards (beta testing). Virtual debit card numbers expire after a single transaction.
For consumers, a credit card remains one of the safest way to shop online, according to "The Senior's Guide to the Internet: Surfing, Shopping, E-Mail and Security."
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