Credit Cards, Debit Cards, Gift Cards and What You Need to Know About Using Them; Part 2 of 3
Staten Island’s only community-based commercial bank highlights the positives and negatives of debit cards
STATEN ISLAND, N.Y. – Debit cards are arguably a popular financial tool. The positives and negatives of these plastic conveniences should never be ignored.
With this in mind, Victory State Bank is sharing the following information from the Department of Financial Services:
A debit card (also known as a check card or ATM card) is a card that is used to access money in a checking or savings account. Debit cards look like credit cards but operate like cash or personal checks. When you use a debit card, you are subtracting your money directly from your bank account and you can spend only up to the amount in that account. Debit cards can be used at Automated Teller Machines (ATMs) and some types are also accepted at many grocery stores, retail stores, gas stations, and restaurants.
There are different types of debit cards:
- Online cards use transactions called Electronic Funds Transfers or EFTs. There is an immediate transfer of money from your bank account to the merchant's account. To access your account, you enter your personal identification number (PIN) in a keypad, as you would at an ATM. The system checks your account and transfers enough money to cover the transaction. The merchant may charge a fee for this transaction.
- Off-line - These cards are known as check cards, and are linked to your checking account. They are available through your bank and carry a credit card logo (such as Visa or MasterCard). The transaction, while it debits your account directly, resembles a credit card transaction, in that you sign receipt, as you would with a credit card. For a consumer, there is no noticeable difference between using these cards and ATM cards - they were created for merchants who don't or can't process EFTs.
- A debit-check card works both as a check card and as a debit card, allowing you to shop at places that take only credit cards, and also to get cash from an ATM.
- The Positives
- Getting a debit card is easier than getting a credit card and will often be issued with a checking account.
- You do not have to carry large amounts of cash or a checkbook and can visit an ATM when you run out of money. This may help you avoid the need for traveler's checks or carrying a lot of cash when traveling.
- You will not build up debt using your debit card.
- Debit cards may be more readily accepted by merchants than checks.
- Government regulations require debit card issuers to hold you responsible for a maximum loss of $50 if the debit card is reported lost or stolen within two days of discovery. Liability increases to $500 if the lost or stolen debit card is reported within 60 days. (After 60 days you will not be able to get any of your money back!)
- There are debit cards that can be pre-paid by a parent for a child. These cards can be used as a financial education tool. The parent 'loads' the card with money and carefully monitors the use of the card.
- The Negatives:
- The money is immediately withdrawn from your account.
- You are charged a fee for a transaction when you use your PIN.
- Using a debit card may mean you have less protection than with a credit card purchase for items which are never delivered, are defective, or were misrepresented. Returning goods or canceling services purchased with a debit card is usually treated as if the purchase were made with cash or a check; you may be limited to a store credit or have to wait for a refund in the mail.
- If you don't report your card as lost or stolen within 60 days your account can be emptied.
- The Positives
About Victory State Bank:
VSB Bancorp, Inc. (OTC: VSBN) is the one-bank holding company for Victory State Bank. As Staten Island, N.Y.’s only community-based commercial bank, Victory State Bank operates five full-service locations on the Island: The main office in the community of Great Kills, and branches in the communities of West Brighton, St. George, Dongan Hills and Rosebank. For additional information, Victory State Bank may be reached at 718-979-1100 or visited online http://www.victorystatebank.com.