Debit Card Rules

There are a lot of rules and regulations when it comes to using your debit card. Adhering to the terms outlined in your agreement can help you avoid fees and limit your liability if you were to be the victim of fraud or identity theft. If you lose your card, contact your bank immediately so a representative can cancel it and issue you a new one with a different card number.

Debit Transactions

You can use a debit card to make purchases at retail outlets that accept Visa or MasterCard. When purchases are made, you have the option of making a debit or credit transaction. Debit transactions require a four-digit personal identification number (PIN), and the funds are deducted immediately from your checking account. Some banks charge a fee, typically 25 cents to 50 cents, for each debit transaction.

Credit Transactions

Your debit card allows you to make credit transactions as well. These transactions don't come out of your checking account immediately; they remain in a pending status for one to three days. The money is removed from your available balance during this time. There are no fees with credit transactions, and you don't have to enter your PIN.

Convenience

Many people use debit cards because of the convenience. They offer an alternative to paying cash or writing a check, and you can conduct bank transactions 24 hours a day, seven days a week via an ATM (automated teller machine). ATMs can be found in a variety of locations, and if you can't find one from your bank, you can use the ATM of another bank, but you usually will be assessed a fee, typically in the range of $1.50 to $3.50.

Unauthorized Transactions

If you lose your debit card, you must notify your bank no later than two days after you discover your card is missing to limit your liability to $50. A delay in notifying your bank could increase your liability to $500 or more. If there are unauthorized transactions on your account, you must report the charges no later than 60 days after you receive your statement. If the transactions involved were performed using the four-digit PIN, a zero-liability policy is in effect, meaning that most major banks won't cover all unauthorized charges or withdrawals completed with a PIN.

Non-Sufficient Funds

If you don't have sufficient funds in your account to pay for a purchase, the charge will still go through, and you are charged a fee for each transaction that goes through under those conditions. The fee, which varies by bank, typically ranges from $35 to $39.

Receipt Policy

When you make a purchase with your debit card, merchants usually give you a receipt. However, legislation has changed, and merchants have been given some leeway with this practice. If you make a debit card purchase that totals less than $15, merchants are no longer required to provide a receipt. The decision regarding whether to give a receipt will be up to the merchant.

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How to Request a Permanent Fraud Alert for the Deceased

The increase in identity theft and credit card fraud has led the credit-reporting companies to develop several methods of consumer protection. One of these methods is called a fraud alert. The company places a fraud alert on a credit report when there has been some fraudulent activity involving the credit cards or Social Security number of the person. Fraud alerts are notations on the account that alert potential new creditors to an increased chance of fraud. Although fraud alerts typically only last for 90 days, they become permanent in the case of a deceased person.

Instructions

1

Locate and write down the deceased person's full name, address, date of birth and Social Security number.

2

Obtain the official death certificate for the deceased person and make a photocopy of it.

3

Write a letter to one of the three main credit reporting companies (Experian, TransUnion or Equifax) explaining that the person is deceased and that there has been fraudulent activity on the account. Include the required personal information about the deceased as well as a copy of the death certificate.

4

Request a copy of the deceased person's credit report from the agency and verify that the report bears a fraud alert as well as the word "deceased" written on it.

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How to Find the Right Prepaid Credit Card

Prepaid credit cards have a number of uses. One-time use prepaid cards are typically used as gift cards. Reloadable cards function as substitutes for unsecured credit cards, and if you don't have a bank account, a reloadable card can also function like a checking account. You can have your paycheck directly deposited to the card, then withdraw it as cash or use it to make purchases. Some cards offer online account management, and others can receive wire transfers or be reloaded at convenience and grocery stores.

Instructions

1

Plan how you want to use a prepaid credit card. If you're planning to use a card occasionally for online purchases, a one-time use card makes sense, for example. With one-time use cards, each time you purchase a new one, you would use a new number, and there aren't significant ties to your identity. If you're looking for a card to use because you don't have a checking account and are tired of carrying cash, a reloadable card makes sense.

2

Research prepaid cards. You can research in person at grocery stores, convenience stores and department stores. Look at the back of the prepaid card package. Find the fee for the card and whether it's reloadable. Look for information on how you reload the card, and if you can check the balance online.

3

Select your prepaid card. Base your decision on the card with the lowest fees (fees should be $5 or less to purchase your card and $5 or less to add money your card) and most convenient reloading options. For example, GreenDot cards can be reloaded at 7-Eleven stores, grocery stores, drug stores and Wal-Mart stores. A Western Union Prepaid MasterCard can be reloaded at any Western Union location. If it's a one-time use card, choose the card with the lowest fees.

4

Register your card. This is especially important for a reloadable card, as the card company will send you a personalized card to reuse. Generally, the card you initially purchase is a dummy card that can't be reloaded, but your personalized card can be reloaded. If it's a one-time use card, registration is optional. The advantage to registering is that if you lose your card, you don't lose your money; the card can be canceled and reissued. The disadvantage is a loss of anonymity.

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How to Deal with Bill Collectors when they Call

Best ways to handle bill collectors when they call.

Instructions

1

When bill collectors start calling you, first thing is to be polite. Learn to be polite to the person calling from the collection agency. They are just doing their job and if you giving a nice reaction most of the time will make the bill collector more understanding and they will be nice back. Do not answer the phone with angry because and angry reaction will only fuel the anger from both side.

2

Try setting up a payment plan, most bill collectors are willing to except a payment plan. Since chances are they have purchased the debt for a lesser amount and are trying to collect on it so they will not lose money. The debt collector needs to collect on the debt and just wants their money. Pay what you can on a payment plan. This will help them get off your back.

3

Ask the collections agency to only contact you by mail this should stop your phone from ringing of the hook. Do not let the debt collector bully you. Some of these place are ruthless and rude and their tactic are against the law. Know the fair debt collecting law in your state and the moment one violates the law report them.
Some debt collectors are nice and understanding and will to work with.

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How to Repair Credit Reports With the Bureaus

Your credit report determines your credit score, which in turn determines whether or not lenders will be willing to loan you money at a reasonable interest rate. Even if you do not intend to take out a loan in the near future, it is vital that you regularly monitor your credit report for errors. Credit reporting errors may remain on your report for seven years or longer and can have an significant negative impact on your score. In addition, credit reporting errors can result in your current creditors raising your interest rates. If you notice errors on your credit reports you can dispute those errors with the credit bureaus in order to have them corrected.

Instructions

1

Order a credit report from each of the three major credit bureaus; TransUnion, Equifax and Experian. If you have not already pulled your credit report for the current year, you may pull one copy of each credit report for free.

2

Scrutinize each credit report for errors. Check account numbers, the amount you owe on each account, your payment history to each creditor, your name and your birth date. Verify that all public records and past addresses are correct.

3

Underline or highlight any inaccuracies that you find on your credit reports.

4

Make a copy of each credit report that contains errors. Also make a copy of a picture ID and your Social Security card to prove your identity to the credit bureaus.

5

Write a letter of dispute to each credit bureau whose report reflects errors. Include details of what information is inaccurate and why. If you have documents that support your dispute, include copies of them with your letter.

6

Mail your dispute letters and copies of your credit report, picture ID and Social Security card to each credit bureau that is reporting errors within your file. Once your disputes are received, the credit bureaus will conduct an investigation within 30 days and inform you via mail of the actions that were taken to remedy the errors within your credit report.

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What Percent Will Collection Agencies Settle For?

When a debtor doesn't pay his bill, the creditor pursues him for money at first, but eventually it will assign the debt to an outside collection agency. If you still do not pay the bill, the account will probably be sold to a debt buyer or another collection agency. A collections company will work to collect at least a percentage of the money owed.

Why Settle?

A collection agent is paid a commission for collecting the debt that is listed with them. If the original creditor still owns the account, but is using a collection agency to help collect the debt, the agency can only settle for a lower amount if the creditor allows it. If a debt buyer has purchased the account, it may be more likely to settle for a percentage of the balance. This is because the debt buyer has bought the account, probably at a large discount.

Current or Recent Debt

If you are current on a bill, the creditor will not settle that bill for less than the amount that you owe. Creditors only settle bills that they don't believe that they will receive payment any other way. If you are current, the creditor has no incentive to settle. If you are up to 90 days behind, the creditor may make some concessions on interest or late charges, or accept a lower payment, but it still will believe that since you paid recently, you will pay again soon.

Aged Debt

When enough time has passed since the last payment, the creditor will write the account off its books. This is strictly an accounting term, and does not refer to your obligation with respect to the debt; you still owe the money. This usually happens at around six months since your last payment. A creditor is more likely to settle for a percentage off at this time than it was before. At this stage, you can try to settle the debt for between 50 and 70 percent of the original balance, depending on the creditor and your negotiating skills.

Very Old Debt

Once a debt passes the second anniversary of no payments, many collectors and debt buyers look at it differently. At this stage, creditors view the debt as nearly worthless. A junk debt buyer may purchase this debt for literally pennies on the dollar. It will buy many of these accounts in a batch from different creditors and collection agencies. The buyer will try to reach people who owe these accounts, or even people who might owe on one of these debts, and try to get them to pay. When debt is at this stage, you can often negotiate settlement in full for as low as 25 percent of the original balance.

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Is Credit Card Settlement Bad?

If you're having difficulty making credit card payments, the promise of drastically reducing your payments through debt settlement may be alluring. However, debt settlement can do serious damage to your credit rating. Unless delinquency has already severely damaged your credit score, and you are on the road to bankruptcy, another option may be preferable.

Definition

Credit card settlement, or debt settlement, is an arrangement in which a company works on your behalf to get creditors to reduce the amount of money you owe them. Usually, creditors agree to debt settlement only if they believe you are a candidate for bankruptcy. Debt settlement means they will receive at least some of what you owe, whereas with bankruptcy they may receive nothing.

Eligibility

If you are delinquent on your credit card payments, and have already damaged your credit score to the point where you are seriously considering bankruptcy, you may be a good candidate for debt settlement. If you are still making minimum payments on time each month, your creditors are unlikely to consider debt settlement as an option.

Effects

Here's how debt settlement usually works: The settlement company collects a deposit from you, along with a monthly payment, which it holds for three to six months. During that period, you make no payments to your credit card company while the debt settlement company works to negotiate the settlement amount. Your creditors will report this delinquency to the credit bureaus, which will negatively affect your credit score. If you have been delinquent for some time, the negative impact will not be dramatic. If the delinquency is new, however, the additional delinquency will have a very harsh impact on your score.

Alternative

Instead of debt settlement, many financial advisers recommend credit counseling. Credit counselors work with your creditors to lower your interest rates, monthly payments or both. You pay the counseling company one lump sum each month, and it uses the money to pay your creditors. The Federal Trade Commission provides recommendations for choosing a credit counseling service on its website (see Resources). The FTC warns that even if a company calls itself a "nonprofit" credit counseling service, they may still charge high fees. Therefore, it's important to protect yourself by researching all the terms of such agreements before signing any papers.

Warning

Although some debt settlement companies are legitimate, consumers must also be aware of the abundance of fraudulent firms, which often charge exorbitant fees to perform debt settlement actions. As of October 27, 2010, a new rule by the Federal Trade Commission mandates that companies offering debt settlement services can no longer ask for an upfront fee before settling a consumer's debt. Before working with a debt settlement company, it's important to ask for their success rate, an estimate of how much money you'll need to save, and the name of the financial institution that will hold your account. According to the FTC ruling, your account must be with a non-affiliated, insured financial institution.

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