Fico Help Central

Debit Cards have become a very popular way to pay for everything from fast food to rental cars, but Debit Card Fees can cost you a fortune.

While there’s no denying they are quick and easy to use, I’ll show you why you should never carry a debit card.

First, it is more Risky than Carrying Cash. In it’s 2007 Debit Issuer Study, PULSE EFT Association reported that U.S. financial institutions lost an estimated $662 million to debit card fraud in 2005. And there is no end in sight.

You’d be safer carrying cash. Although you don’t have much recourse if it’s lost or stolen, at least your loss is limited to the amount of the missing money.

Carry a debit card, and you put the entire balance in your bank account at risk. If you link your checking account to your savings account to avoid overdrafts, you put the balance in both accounts at risk.

Second, it is more Dangerous than a Credit Card. If a thief gets your credit card, the federal Truth in Lending Act limits your liability for any fraudulent credit card charges to $50. You may not have to pay even that amount, as many financial institutions don’t impose any charge on their defrauded customers. And while the theft is being investigated, you can refuse to pay any part of the unauthorized charges.

Debit cards fall under a completely different law, the Electronic Fund Transfer Act. To limit your liability to $50, you have to notify your bank within two business days of discovering that you’re debit card has been lost or stolen. Wait longer than that, but give your bank notice of the fraudulent transactions within 60 days of when your statement is mailed, and your maximum liability jumps to $500. Miss that deadline and you could lose all the money in your account.

Obviously, Debit Card Fees are a real problem and through a very insignificant error, or no fault of your own, you could be left with hundreds of dollars of fees when it was all avoidable.

To learn more about how to dramatically Improve your Credit Score, visit my website at www.ficohelpcentral.com.

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