Mike about Money

New Debit Card options - How to protect your account

Mike about Money | New Debit Card options

PayPal will be expanding its in-store payment offerings this year, now offering users the ability to deposit money onto a prepaid debit card or use their service via a partnership with Samsung Pay, as the Wall Street Journal reported earlier this month.

The payments company will now allow users to put money into an FDIC-insured prepaid debit card for retail purchases. This product is focused on those consumers who may not have bank accounts and therefore, be shut out from financial services.

In addition to the debit card initiatives, Samsung Pay users will now be able to add PayPal as an option when paying with their Samsung wallet.

Mike about Money reminds our readers to be very careful how and where they use their debit cards and applications connected to Debit Card accounts.

You don’t have the same protection against fraud when using a Debit Card that you have with your credit card accounts. With a Debt Card, your bank account is at risk. The other issue is that there’s a much shorter window of time (just two days!) for cardholders to report a suspicious transaction made on a debit card versus a credit card before their liability climbs from $50 to $500. And if you wait more than 60 days to report theft or fraudulent use, you could be left with responsibility for the entire financial loss with no help from your bank.

If you use a Debt Card to make a payment, sign for the transaction instead of keying in your PIN. Always choose signature over PIN transactions with your debit card. Merchants would prefer that you use your PIN because it’s cheaper for them, which is why most payment terminals are set up with a PIN prompt as a default, but it’s riskier because it gives data thieves the option of creating a fake debit card and hitting the ATM to take out your money.

Visa and MasterCard offer zero liability coverage for signature transactions on Debit Cards they license. This is a great benefit and provides similar protection against fraud and theft as Credit Card transactions.

One way to avoid high interest Credit Card debt troubles is to use a Debit Card, which is like paying cash for purchases and you are limited by the money that is in your account, unlike Credit Cards. So, Debit Cards, if used safely and securely, are a good tool for avoiding debt and overspending. 

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