Ins and Outs of Debit Cards

The folks from New Horizons Credit Union stopped by Studio10 to explain the ins and outs of debit cards.

Click on the video link to watch the informational conversation.  For your convenience, a summary of that conversation is also listed below.

Could you explain the way a debit card works?

• Just like writing a check, it’s tied directly to your checking account.
• When you swipe your card at the checkout, you have the option of using your PIN (Personal Identification Number) or you Signature.  The transaction amount comes directly out of your checking account either immediately or at a later date, so it’s important to keep those transactions in your registry.
• The online banking, it’s easy to make the mistake of checking your balance and then overdrawing your account because you thought everything had cleared.

You mentioned you can choose PIN or Signature option at checkout, does it make a difference which
one you choose?

•      The PIN option has a level of protection because you have to know the number. PIN transactions are usually settled more quickly.
• Signature transactions usually come with additional fees for the merchant, that is why some businesses only offer you the PIN option.

    What about reward points… are these offered with debit cards?

• Some do, some don’t, but most of the time reward points are only offered if you use the Signature option during your transaction.

Are there any places that you need to be cautious using your debit card?

• Yes, when you use your card to pay-at-the-pump at a gas station, they put a hold of $1 to $100.
• Restaurants, your card leaves your sight or sometimes they will run it for more estimating the tip you are going to leave. 
• Hotel Reservations or when you check in and they ask for a card for incidentals… they put a hold
• for an estimated amount of your stay directly on your account. 
• On the internet, make sure you verify the checkout is secure.

Is there any protection if your card is stolen?

• Yes, but make sure to report it as soon as possible. If you report it within 2 days, your liability is capped at $50.
• Wait more than 2 days and you could lose as much as $500. 
• Wait more than 60 days and you could lose everything in your account plus overdraft fees.

New Horizons Credit Union
3445B Saint Stephens Rd
Mobile, AL 36612-1238
251-316-3240
www.newhcu.org

Sponsored by New Horizons Credit Union