Just want to share this to you guys... since I work for a US company, IĀ* only have this information to share. I don't know how this works here in the Philippines. But this might be useful.
ATM/Debit Cards: What consumers need to know about greater fraud risk, card blocking, and debit card fees.
Debit card liability could cost you a lot -- while credit card liability only $50, by law.
Debit cards used with signatures make banks a lot of money.
Debit card blocking a problem.
SUMMARY: A debit card is an ATM card with a VISA or Mastercard logo on it. [VISA calls them "Checkcards" and Mastercard calls them "Mastermoney" cards.]
The difference? Debit cards are riskier than password protected (PIN-only) old-fashioned ATM cards because debit card can be used with a PIN OR can also be used with only a signature, without a secret PIN or password, just like a credit card, over the phone or in a store.
Debit Cards: Much greater liability risk than credit cards:
-- Legally, your ultimate liability for fraudulent use of a credit card is generally only $50. And, when a credit card is fraudulently used, you are also only disputing whether you owe the bank money.
-- Unlike a credit card, if your debit card is used fraudulently, the thief robs your checking account. Potentially, all your money is drained out of your checking account. It could take the bank 10 days or more to investigate and refund your money. In the meantime--you could bounce checks to your landlord, credit card company, or mortgage company.
-- Worse, unlike a credit card, under the law, your debit card liability could be as much as $500, if you notify the bank more than 48 hours after you learn of the problem or even up to all the money in your checking account plus your maximum overdraft line of credit if you fail to notify the bank within 60 days.
Even worse, you are fighting to recover your own money back into your own checking account. It is true that some banks may eventually honor the voluntary $50 limit, but consumers face horrific problems because while the bank is conducting its internal investigation, consumers are dealing with other checks that may bounce, and consumers face enormous hassles explaining what happened to the bounced checks they wrote to their other creditors, since the fraudster drained their account.
-- Debit cards may offer some convenience. But debit cards have more risks than PIN-based ATM cards. Since the risk of credit card fraud on the Internet is so high, we urge consumers to ONLY use credit cards on the Internet-- never use debit cards. In addition to this greater legal liability protection with a credit card, you have greater legal protection if goods are defective or don't arrive, under the Fair Credit Billing Act, which applies to credit cards.
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Debit cards make banks a lot of money. When you use the card like a credit card (with a signature, but not with a PIN), banks take a hefty fee from the merchant. When you use it with a PIN, like an ATM card, more and more banks are charging you a transaction fee (called a POS fee) of $0.25-$1. Other banks are charging a monthly card rental fee (even if you do not use it at all) of $1-2/month. That adds up to $12-24/year, plus transaction fees. Of course, banks are hitting you with a POs fee in hopes you use the card with a signature-- so they can make more money from the merchant.
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"Blocking" is also a problem with debit cards. Some firms (hotels, gas stations and rent-a-car companies) routinely block a card in advance for the estimated cost of a transaction that may not be completed for several days. It isn't a problem for most credit card customers, unless they are near their account limits. But if you buy ten dollars worth of gas with your debit card, you may not know that the station may routinely block all transactions for $50-75, then doesn't "un-block" as you drive away -- it waits until that evening, or worse, every few days to conduct a "batch" transaction. If you are close to your checking account limit -- much more common than being close to a credit card limit -- you could end up bouncing checks or be refused transactions by other merchants due to faulty blocks. Most banks do a poor job of informing consumers that they may bounce transactions due to overdrafts created by blocks. Of course, virtually no gas station explains their blocking policy, which presumes everyone drives an RV or tractor trailer truck, and is filling it up.
-- Finally, most banks don't ask for consumer consent. When ATM cards expire, they replace them with risky debit cards. And, we are unaware of any bank that adequately explains the risks of debit cards.
WHAT CAN CONSUMERS DO TO LOWER DEBIT CARD RISK?
(1) If you don't want a debit card, demand a plain old ATM card.
(2) If you do want the convenience of a debit card, lower the risks:
-- Never use a risky debit card on the Internet. Only use a credit card for Internet transactions. In addition to greater legal liability protection with a credit card, you have greater legal protection if goods are defective or don't arrive.
-- Use a debit card only with merchants you trust. It is also a good idea never to let it leave your sight-- it's one thing to watch a clerk "swipe" it right in front of you at the cash register and hand it back to you. It's another story when you hand it off to a potentially unscrupulous waiter or waitress who could have an illegal card "skimmer" (the size of a pack of cards) in their pocket and copy your information after they walk away with it.
-- Just as you wouldn't use it on the Internet, don't use it to call info-mercial 800#s off the television. If you have a dispute over double-billing or products that don't arrive from a sleazy info-merchant, remember-- you'll be fighting to get your own money back, and that could take ten days or more of arguing with your bank.
Re: cash/debit card?
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