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Debit cards are very popular especially with consumers who have a budget and for those that are disciplined with their finances. These cards are an ideal combination of self-regulation as well as convenience. These are easy to carry and safer than cash. They are also not as cumbersome as checks.
Debit cards are accepted at all the outlets where credit cards are accepted. Debit cards basically use up the money from the card holder’s account and hence they are exempt from the shocking interest rates, contract terms that are hard to decipher, late fees etc. These are some of the best features of a debit card.
However, there is always a flip side to everything and the drawbacks with debit cards are that they do not offer the consumer protection that the credit cards offer. This is something that debit card holders fail to see. The realization dawns on them only when funds go missing from their accounts. When it comes to fraudulent practices debit cards are high on the list as the incidence of theft and misuse are very high with debit cards and consumers are not protected by the regulations.
The incidences of fraudulent practices have also gone up just like the way debit card usage has gone up. The losses due to these debit card fraud had amounted to around $788 million in the year 2008 and is steadily rising as per the reports from the American Bankers Association. Fraud is on the rise and it is leaving people frustrated as well as vulnerable especially since the banks don’t take any responsibility and are unable to even give information regarding how the fraud happened.
Zero liability is offered by almost all debit card issuers as well as financial majors and they promise a reimbursement to their customers in case the safety of the debit card is compromised. However, not all transactions done with the debit card have this cover. In case the theft is not reported immediately, consumers tend to lose out on the zero liability guarantees as the card issuer deems the card holder irresponsible by way of sharing information or being part of the fraud. It is difficult to get their money back immediately even if they are covered. This could be serious issue especially for those that depend on their monthly paychecks. Although debit as well as credit cards are issued by the same card companies the laws that govern them are different.
