By Charlestien Harris, Retired Financial Coach at Southern Bancorp
The days of using paper money and coins to pay for purchases are disappearing rapidly. Most consumers have transitioned to using debit cards as their preferred method of payment. Two of the most common reasons for this shift are convenience and the ability to avoid carrying cash, writing checks, or paying a credit card bill later.
Debit cards have become increasingly popular and are even used by government agencies such as the Social Security Administration and the Internal Revenue Service. This allows recipients and beneficiaries to receive payments through direct deposit that can be accessed with a prepaid debit card.
When you make a purchase with a debit card, you often have the option to choose either a “debit” or “credit” transaction. This choice determines how payment processors handle the transaction, how quickly money moves, and other factors that affect both retailers and customers.
Here are a few tips to help protect your debit card and manage your account safely.
Tip #1: Know where your card is at all times, and memorize your PIN. Never keep a written copy of your PIN with your card.
Tip #2: Keep your PIN a secret. Never share it or allow anyone to see you enter it. When a debit card is used, a PIN (Personal Identification Number) may be required, and funds are automatically withdrawn from your bank account. Some transactions can also be processed with a signature and may take a couple of days to clear.
Tip #3: Be cautious when providing your debit card number over the phone or online unless you are dealing with a trusted source or a secure website.
Tip #4: Do not use an ATM (Automated Teller Machine) if it appears suspicious or shows signs of tampering.
Tip #5: Keep a record of your account numbers and important phone numbers in a secure location separate from your cards so you can quickly report a loss or theft.
Tip #6: Always know how much money is available in your account. Most banks provide phone numbers, online banking services, or mobile apps that allow you to check balances and monitor activity.
Tip #7: Record each transaction immediately and subtract it from your account register balance. If you prefer digital tools, many apps can perform this task automatically. Each month, review your account statement and compare every transaction with your personal records to ensure they match.
Tip #8: Check your account balance and transaction history regularly to ensure no fraudulent activity has occurred.
Tip #9: Be aware of transaction fees, when they may be charged, and where you use your card. If you use your card at your bank’s ATM, there is usually no charge. However, using your card at another financial institution’s ATM may result in a fee.
Some fees may be associated with debit card use. One commonly incurred fee is an overdraft fee, which is charged when a transaction exceeds your checking account’s available balance. Another possible fee is an account maintenance fee. This fee may be assessed if you exceed the maximum number of allowed transactions or fail to maintain a required minimum monthly balance.
Tip #10: Report any unauthorized transactions immediately, and be prepared to close the account if necessary to prevent additional losses or fraudulent activity.
If you report your card missing before it is used without your permission, you are not responsible for unauthorized transfers. If you report the loss within two business days after discovering it, your liability is limited to $50. However, if you fail to report the loss promptly, you could lose up to $500. Your loss could be unlimited if you do not report an unauthorized transfer within 60 days after it appears on your account statement.
Remember, even if your financial liability is limited by law, fraudulent transactions can still remove money from your account, and resolving the issue may take time. Be sure to keep your bank informed of any changes to your contact information.
Tip #11: Notify your bank before traveling out of state. The bank may place a travel alert on your card to help prevent legitimate transactions from being flagged as suspicious or fraudulent. Taking precautions while conducting financial transactions is always in your best interest.
Debit card accounts offer many advantages for both consumers and businesses. Be sure to read your debit card terms and conditions carefully so you understand any fees, guidelines, and requirements and are not surprised by unexpected charges.
Electronic fund transfer (EFT) deposits are generally faster and safer than paper checks, whether mailed or printed. During the summer months, when many people are traveling and on vacation, fraudulent attempts to access consumers’ funds often increase. Protecting your hard-earned money by learning how to use your debit card safely can have a significant impact on your personal finances and help you avoid unnecessary stress and inconvenience.
Until next week – stay financially fit!
