Paying Online

If you’re like most people, you probably love using debit cards for your online purchases. These cards (also known as money cards, check cards, ATM cards, or cash cards) not only save you from paying the high interest rates of credit cards, but they are also SO convenient. The funds are automatically and, most times, immediately deducted from your bank account, which can make balancing your checkbook much easier. But that same convenience and savings can turn into a HUGE headache, as well as a severe financial drain, if cyber thieves steal your card number.
Because your debit card is linked to your bank account, your personal funds can be emptied in a matter of minutes, and there’s not much you can do. Once the money is gone, it’s gone. Not only that, but all of the checks that have yet to clear your bank will start bouncing all over the place, accompanied by huge NSF fees and…Yikes! You are broke and even deeper in debt than if you had used a credit card in the first place.
Another problem with using debit cards is that the federal regulations governing their use differ (unfavorably) from the ones governing credit cards. Credit cards are governed by the Fair Credit Billing Act, which states that, if you report the loss or theft of your card as soon as you notice it, you are only liable for $50 of the loss incurred. Debit cards, however, are governed by the Electronic Fund Transfer Act, where you may be liable for $500 or more of the loss no matter WHEN you report it.
Although many banks are now rushing to assure consumers of policy changes that lessen such personal/financial liability, a policy cannot offer the same assurance of a federal law.
So next time you make an online purchase, you might want to consider using your credit card. Your bank account may thank you someday.