Credit Cards and Debit

Credit Cards, Debit Cards are the various forms of plastic money which gives one easy access to cash. With Credit Cards gaining popularity, it is very important to handle it carefully. There are certain characteristics one must have a clear concept about while using the credit and debit cards. In this chapter we have discussed about the various aspects of debit and credit cards. These are a few guidelines as to how one can use the cards without any problems and also use it for maximum benefits.

Billing Errors

CREDIT- Notify the card issuer in writing at the address specified for billing errors when you find an error within 60 days after the first bill containing the error was mailed to you. The card issuer, in turn, must look into the problem and either correct the error or explain to you why the bill is correct within two billing cycles and not later than 90 days after the issuer receives your billing error notice. During the period when the card issuer is investigating the error, you do not have to pay the amount in question.
DEBIT- If you find an error, you have 60 days from the date of the receipt to notify the bank. Otherwise, the bank has no obligation to investigate the error. The bank has ten business days from the date of your notification to investigate the problem and tell you the result.

Unauthorized Use

CREDIT- If your credit card is used without your authorization, you can be held liable for up to $50 per card. According to the federal law the card issuer cannot hold you responsible for any unauthorized charges if you report the loss before the card is used. This is true even if a thief uses your credit card at an automated teller machine (ATM) to access your credit card account.
DEBIT- Consumer complaints have moved some states and banks to make concessions and March 1, 2000 federal regulation states that you are no longer responsible for the debt if your card is reported lost or stolen within 2 days. Prior to March 2000 the consumer was liable for $50 if the card was reported lost or stolen within 2 days and $500 if reported between 2-60 days after the loss. After 60 days, the consumer was hold responsible for the full amount. There are a few unique situations where this rule remains applicable even now.

Purchase Protection

CREDIT - If you have a problem with merchandise or services that you charged to a credit card and you have made a good effort to work out the problem with the seller, you have the right to withhold from the card issuer payment for the merchandise or services. You can withhold payment up to the amount of credit outstanding for the purchase, plus any finance or related charges. If the card you used is a bank card, a travel and entertainment card or some other card not issued by the seller of the defective merchandise, you can withhold payment only if the purchase exceeded $50 and occurred in your home state or within 100 miles of your billing address.
DEBIT - Federal regulation makes no stipulation; however, a local bank may.

Grace Period and Fees

CREDIT - There is no interest charge until the payment due date. Each card provider authorizes their own fees for late charge, cash advance, over-the-limit fees, balance transfer, etc.
DEBIT - Since the amount is withdrawn directly from the account, it should be considered "immediate" with no thought of grace period, although sometimes it does take 2-3 days. Where as "Stop Payment" is the only method to cancel an obligation if the transaction does not appear for any amount of time in many banks. Other banks such as Commercial Federal are different. Such a transaction can be reversed only by having the merchant run a credit or void the transaction. In this case be sure to obtain the receipt as proof. It is suppose to post within 30 days. In case it fails to do so, your receipt will reamin the proof and the bank will post it for you by reversing the charge.

Usually there is no charge for using your own ATM though the number of withdrawals may be limited. Other institutions or merchants may have a fee. It is best to ask first. Fee is often a $1.00 minimum or % of amount.

Credit History

CREDIT -Use of a credit card is reported to the credit bureaus building either a stronger or bad credit report.
DEBIT - Debit transaction is not reported to the credit bureau and therefore is not a source to build credit history.