A School Teacher Learns that Using a Debit Card Can Be Dangerous. Find Out How?
Originally posted 2009-10-16 16:27:49. Republished by Blog Post Promoter
With credit being more important than ever, how would you feel if the cash that you work so hard for is in danger, too? How? When you use your debit card, you are using cash from your bank account. If that account number is stolen you do not have the same protection as if your credit card account is stolen.
If someone steals your credit card number and you report it stolen, you are only liable for $50 of the unauthorized charges. However, with a debit you must report the theft in two days of the theft to get the smae $50 limited liability protection.
Reporting the theft within two days of occurs is more difficult with a debit card because you receive the statement once a month and fraud protection is not offered by many bank institution for a checking or saving account.
Another important thing to remember about your debit card purchase is that the protection decreases as the fraud or theft continues. How? If you miss the 48 hours deadline in reporting the theft, but you report the theft with 60 days of occurs you are liable for up to $500 of the unauthorized charges. If report after 60 days, you are responsible for all unauthorized spending.
There is good news, though, if you use your debit card as a credit card where you sign for your purchase you are protected by the same laws as an unauthorized credit card usage. The key here is that it must be used as a credit card purchase. It is not a credit card purchase if you enter your pin number.
To protect yourself check your balance daily and balance your checkbook.
How Does Your Banking Choices Affect Your Credit
Despite the fact that banking fees are not part of your credit, those fees do affect your credit. How? Those unexpected fees that happen as a results of:
Can cause you not be able to pay your other financial obligations. After all, when your check is direct deposited in the bank the fees owed are paid first, then whatever, bills or checks that you write against the account. There are, however, ways to avoid these unnecessary fees and yet a strong grasp of your credit at the same time.
The number one way to get a stronghold on your credit using your banking account is to balance your checking account. Ensure that your write down all your transactions in your check register including any fees that may be associated with the transactions. Next, balance your check book by subtracting the amount of the check, debit card transaction, or ATM transaction from the balance of the account.
Stop using “foreign†ATMS. This alone can save you up to $200 a month depending on the frequency that you withdraw money from the “foreign†ATM. As a matter of a fact, the charges for the use of a “foreign†ATM can be as high as $3.00 per transaction. In addition, your financial institution can charge you additional fees, as well, for honoring that transaction.
Understanding the fee structure of the bank before joining it can save still yet a lot of money. Some banks charge fees if you fall below a certain amount in the account. Still yet, the bank may charge fees if you write over a certain prescribed number of checks each month. For instance, one bank can charge $10.00 for every check over 25 that were written. Still yet, I found out from a friend that his back was charging him an overdraft fee for a debit card transaction that over drafted his account and $10.00 a day until he deposited money into the account to clear the transaction. He had amassed at that time over $400 in bank fees.
Another fee structure or pay structure that could get you in trouble with your banking institution is that of interest bearing accounts. On average an interest bearing checking account requires you to have a minimum balance of $832; where as, a non-interest bearing account has a minimum balance of $88. However, with the historically low interest rate that interest bearing accounts draw it may not be beneficial to have such an account.
A great saving choice is that of an insured money market account. It pays a higher interest rate than a regular savings account. Remember, that you can build a nest egg with as little as five dollars a week. I remember when money was tight for me I started with ten dollars a week. Those ten dollars a week went to purchase stock in a company that was considered a commodity. A commodity is something that you or anyone for that matter can use no matter what the economy is doing. As a matter of a fact, that stock help put a down payment of n a home and a car. Incidentally, I still have that stock, today. My point is start small if you have to but start saving.
Another option is look into internet banking. Be careful and shop around for the best option for you. Some internet banks offer better deals, higher yields, and lower fees than traditional banks. The drawback is that you will have to pay “foreign†ATM fees; however, some internet banks reimburse those fees.
Traditionally, the fees, interest rate, overdraft fees, etc. that you pay or receive is often overlook as having an adverse affect on your credit.
I hope this article has opened your eyes to the importance of shopping around for the best banking options and how doing so can improve your chances of acquiring not only a home soon, but improve your credit.
