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When you open a checking account you can expect
the bank to include a debit card or, as some banks call it, a check
card. These cards give you additional flexibility when it comes
to paying for purchases.
Traditional ATM cards only allow you to withdraw cash
or perform other transactions at an automated teller machine. Debit
cards let you pay for purchases in stores. The money is taken directly
from your account. There's no "pay later" option with
debit cards.
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Debit cards at a glance |
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PIN versus signature
Some debit cards require a personal identification number, or PIN;
others simply require your signature. A PIN-based or direct debit
card removes the purchase price from your checking account almost
immediately. These debit cards are typically accepted at supermarkets,
gas stations, drug stores and superstores such as Wal-Mart.
A signature-based or deferred debit card has a Visa
or MasterCard logo and is accepted anywhere Visa and MasterCard
are accepted. Just as you would with a credit card, hand the clerk
your card, sign the sales slip and you're done. The purchase price
will be removed from your account in two or three days.
Some banks offer both types of debit cards, and some
put both debit functions on the same card. When you swipe your card
at the checkout line, the clerk will ask if you want to pay by debit
or credit. If you select "debit," you'll need to key in
your PIN. If you select "credit," you'll sign the sales
slip.
Identity-theft protection
Consumer advocates often urge people to choose PIN-based direct
debit cards only, since the PIN adds a layer of protection against
identity theft. With a signature-based debit card, anyone could
pick up the card and use it.
You have some federal protection if a thief gets your
card and goes on a shopping spree, but you must act quickly.
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Chapter 2: ABCs of ATMs
