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Quoted Text

Debit cards popular but carry some risk
BY JILIAN MINCER Dow Jones Newswires

   NEW YORK — The use of debit cards is rising much faster than consumers’ appreciation of their risks.
   The cards, which aren’t credit cards but often look like them, take money out of a person’s bank account when a purchase is made. Despite the growing popularity of debit cards, many consumer groups recommend limiting their use, or not using them at all, because they don’t have the same liability protections as traditional credit cards.
   “Consumers need to think when they use these things,” said Paul Stephens, director of policy and advocacy at the Privacy Rights Clearinghouse, a nonprofit consumer group in San Diego.
   Debit cards’ use is growing especially fast among young adults.
   “More and more consumers are using debit cards over cash and checks because it is convenient,” said Nancy Krattli, vice president of consumer debit products at Visa USA.
   In 2006, she said, $459 billion was spent on Visa consumer debit cards, 11.9 percent more than in 2005.
   The cards are particularly popular with 18- to 25-year-olds, who have been dubbed “Generation Plastic.” An April poll from Visa found that 76 percent of Gen P “never leaves home without a payment card, and one-third rarely carries cash.”
   Consumers frequently assume that debit and credit cards are the same. They are actually regulated by different laws because a credit-card transaction is similar to a loan. When a credit card is lost or stolen, consumers are responsible for only $50 of any fraudulent use, a charge which is often waived.
   With a debit card, the liability varies, by law. The loss could be limited to $50 if a card holder notifies the financial institution within two business days after learning of the loss or the theft of the card or personal identification number. Beyond the 48 hours, the card holder could lose up to $500.
   The loss could be even higher if the card holder doesn’t report it within 60 days after receiving a financial statement listing the fraudulent transactions.
   Many banks, especially the large ones, are committed to returning siphoned funds within 24 to 48 hours because they want to keep clients. However, it could take the bank 10 days or more to investigate and return the money. And that could lead to bounced checks.
   “For most consumers, a big issue is having access to their money,” says Stephens of the Privacy Rights Clearinghouse.
   A lot of people are living paycheck to paycheck, he said, and “when you have some sort of fraudulent action, the funds are not immediately available.”
   Some companies, including Visa and MasterCard Worldwide, have a “Zero Liability” policy to cover unauthorized purchases made with a debit card.
   However, the policy applies only if a consumer signs for the purchases. Signing ensures that the transactions go through the Visa and MasterCard networks, which watch for potential fraud.
   Many banks also provide zero liability, but card holders should check with their financial institutions about terms and conditions.
   Edmund Mierzwinski, consumer program director at U.S. PIRG, the federation of state Public Interest Research Groups, says there are other problems with debit cards including more frequent overdraft fees.
   “It’s much easier to overdraw your [debit] account,” he says. “A debit card gives you a latte if you have no money. A latte costs $5, but the bank gets a $30 overdraft.”
   Consumer groups recommend using a credit card that you can pay off each month because it builds credit and provides more protections. They also recommend using a credit card rather than a debit card with Internet orders for more protection if the goods are defective or don’t arrive.
   All debit-card and credit-card users should keep receipts, review statements and check their balances regularly. Also, they should choose a unique PIN and never carry the number with the card. Contact your financial institution immediately if the card is missing or you suspect a problem.

So this 'so called GENERATION PLASTIC' will be raised and taught to use their debit cards, when in fact it is not proven safe. Then for sure they won't know how to count out real money. Make up my mind, please!!

The scarier part is that as the generations move on there will be a different "visual" as to what $$/value is.....

If I give you an apple pie and tell you there are apples in it, you have never seen an apple before, then I procede to tell you cut 30 medium sized wedges of apples into a pie crust....how would you know how many apples to buy once you learn what one is.....

Just like the super-size me drinks....if you dont know what a gram of sugar/carbohydrate is, why would you care how many are in a super-size as opposed to the regular size......

Standard measurement or metric???

It's just another movement towards one world currency.

Dont ya know it.....