Released July 24, 2009
MURFREESBORO, Ark. - Credit cards and debit cards may have similar functions, but there are major differences between the two that consumers need to understand, according to Robbie McKinnon, Pike County extension agent for the University of Arkansas Cooperative Extension Service.
"Many consumers don't realize that a hold is placed on debit cards when the holder is traveling," she said. "These temporary holds are meant to ensure you don't deplete the funds in your account. In some cases, your card may appear to have no funds, and the hold can last up to eight days.
"For these reasons, many people are deciding that using a credit card for hotels or rentals is better for them than using the debit card," McKinnon said.
Recording debit card amounts should be done as soon as possible.
"Ideally, debits should be recorded on the spot, as if you've just written a check," she said. "Sloppy record keeping may lead to some unpleasant surprises in the form of an empty bank account and expensive overdraft fees."
When it comes to theft, there are differing policies about debit and credit cards. Many credit cards have limits on consumer liability if the card is stolen and the thief rings up a hefty bill. This may not be the case with a debit card.
"Should you lose your debit card, contact your bank as soon as possible," McKinnon said. " Speed is your advantage when reporting loss of a card. Your liability is unlimited if you miss the 60-day deadline. You could be liable for all of the charges plus overdraft penalties."
The Cooperative Extension Service has a debit and credit register available for download at http://www.uaex.edu/Other_Areas/publications/PDF/FSFCS53.pdf.
For more information on safe use of debit and credit cards, visit http://www.uaex.edu and search for "credit card" or "debit card."
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http://www.uaex.edu/news/july2009/0724debitcards.htm
Writer: Elizabeth Fortune, (501) 671-2120, efortune@uaex.edu
