Debit cards are a useful method of paying for goods with an available balance rather than credit. However there are some dangers in using debit cards, and they should be watched.
One of the main dangers with debit cards is that they can be copied and used for fraudulent transactions. For example, a debit card’s details may be stolen and the account emptied by the thieves before the account holder is even aware there’s a problem. The banks issuing debit cards are aware of this issue and have a number of sophisticated anti-fraud measures in use, one of which tracks spending on a debit card and notifies the customer if there are suspicious or out-of-character transactions, minimising although not utterly eliminating that danger.
Another anti-fraud measure taken by debit card providers is a zero liability guarantee, which ensures the debit card holder will not be charged for any unauthorised transactions, as long as he or she did not contribute to the fraud through carelessness. The debit card user also should inform the debit card provider in good time if an unauthorised transaction has appeared on the statement.
A further danger with debit cards is overspending. Debit cards are more convenient than a chequebook, making spending almost too easy. While people tend to be more aware of cash in their pocket diminishing, the layer of separation provided by the debit card tends to fuzzy one’s financial situation. Bank balances should be checked relatively frequently if using a debit card, to prevent accidental overdrafts against the account.
Spending abroad with debit cards can create another issue.. Debit cards remain convenient internationally, as they charge in dollars but pay in the local currency and they are accepted at a wide range of outlets. However, the charges for foreign transactions can add up quickly. Debit card users should be aware of these charges prior to the trip and should monitor their spending even more closely while abroad.
