An article in Money.Mic aimed at helping consumers determine when to use their credit card vs. their debit card is not really all that helpful. The article would have consumers believe that banks are making millions from unsuspecting debit card users who overdraw their accounts. The idea that consumers are knowing overdrawing their accounts and absolutely rely on overdraft protection to get them to their next paycheck is not contemplated:
In 2010, new regulations come into effect which protect consumers when their debit accounts are overdrawn. Now, institutions must confirm that account holders wish to opt in to these overdraft programs, so there are no more surprise fees.
If you opt for overdraft protection, you need to watch your account balance(s) to be sure you don’t overspend.
After all, banks are still making millions from users’ inattentiveness to their account balances and ATM fees
Also, a warning shot was fired that debit cards are dangerous if compromised and consumers are left with few protections if unauthorized transactions occur:
Spot an unauthorized charges on your credit card bill? You can alert the company, call foul on the charges and not pay the bill, keeping your money. When funny-stuff happens on your debit card, your money instantly disappears from your checking account — and it’s tough to get it back.
Space was not given to discuss how financial institutions and their supplier partners strive to protect debit cardholders from fraudulent activity or how FIs often go above and beyond the legal and compliance regulation to make their customers financially whole when fraudulent transactions occur.
Overview by Sarah Grotta, Director, Debit Advisory Service at Mercator Advisory Group
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