Tuesday, April 17, 2007

ATM & Debit Card Tips

One of my more-frequent topics on this blog has been the use (and misuse) of ATM and debit cards. I have ATM/debit cards on all my bank accounts, but anymore, I use them only for ATM deposits and withdrawals. Purchases, monthly bills, and everything else earn the use of either my credit cards, checkbook, or automatic electronic withdrawal.

This month my credit union's account statement included a flyer discussing the use of ATM and debit cards. They laid out "Four Rules of Debit Card Use," and given my personal experience, I found them to be pretty darn on-target. Here's how it went:

Always have another form of payment available.

I'm glad this was their first "rule," because it's Number One in my mind, too. "Another form" could be credit cards, cash, travelers' checks, or whatever. Actually, I'd recommend always having at least two forms of payment available, no matter what your first choice may be.

Let's face it: All types of payment cards can become demagnetized or compromised inadvertently. And never think the payment network systems are infallible, because they aren't. Network or phone problems could cause your cards to be denied, too. (Usually at the worst possible time.)

If your ATM/debit card suddenly does not work, your card may have been compromised.

According to my credit union, they immediately cancel debit cards as soon as they're notified by VISA that the card may have been compromised. You, the customer, will likely not be notified so quickly.

"We apologize for this inconvenience," they wrote. "We do also immediately order a new card and PIN. We try to notify all members whose cards have been compromised."

Notify your financial institution before traveling to another state or country if you will be using your ATM/debit card.

"VISA alerts us when cards are used outside of the normal usage areas," the flyer read. "If we cannot contact you, we may suspect fraud or theft and cancel your card, thus causing you inconvenience. By notifying us of your travel plans, we can better serve you."

Pretty much says it all, I think.

Be aware of the daily purchase and withdrawal limits.

Man, if I could get people to grasp this concept, I'd be on Cloud Nine. I have yet to come across a bank or credit union who doesn't have daily limits on debit-card purchases and withdrawals. But at least once per month I run into a customer who's unaware of their bank's policies, and who blows a gasket when the payment network DENIES their $839 debit-card charge to pay for a repair bill.

Keep in mind, too, that the "purchase limit" and the "withdrawal limit" are likely not the same amount. In my credit union's case, their daily purchase limit is $1,500. The daily withdrawal limit (like via ATM), though, is only $500.

So if you're not sure what your debit card's limits are, grab the phone and find out. Do it yesterday.

Sure beats having two blown gaskets — the one in your car, and then the one in you when you can't pay the bill!

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— Posted by Michael @ 12:19 AM


As to always having another form of payment available, it's exactly what i try to do. Debit cards are not always a good option when you're going to make a large purchase. I personally, carry a number of credit cards about when i shop here or abroad.

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