Qs for Robespierre:
You wrote:
"As a Visa/Master Card/American Express/Discover/Carte Blanche/Diners Club merchant since 1991 . . ."

My questions:

I accepted the offer of one of my banks to change my ATM to a debit card a couple of years ago. When I use it as a debit card for purchases does the merchant pay the same commission to MasterCard as if I was using my other MasterCard credit card?

My other bank is offering promotions to convert their ATM to a debit card. There must be something in it for them. Do you know what or how much? Would my bank get a slice of the commission? I guess that might be a dumb question.

Many merchants do not accept Amex. I was told once that the reason is that Amex takes weeks to mail a check to the merchant whereas VISA and MC transfer the funds immediately. How say you?

To luu 38 the debit card is much bigger in the US. So being noverseas is not a factor in its use.

Debit card takes directly from your checking account(and you must have funds there) IMMEDIATELY. A credit card takes at least about 25 days before you have to pay up. Even writing a check takes a few days before your money leaves.

The only reaso n I see for a debit card is if you haven't got the credit rating for a CC.

My debit card has almost completely replaced my checkbook, and I can't imagine life without it anymore. The convenience of being able to withdraw money in local currency wherever I am in the world is worth any small risk having one entails. Funnily enough, I have never had a problem with a debit card, but I have had someone alter one of my paper checks, adding an extra zero to the amount. It even got past the bank, but I did get reimbursed in the end (and the crook went to jail).

When traveling you should always have readily available a list of your credit card numbers, and telephone numbers to call if you lose the card. Carry the list with you, or leave it with someone at home, whichever you prefer.

Whether you use a debit or credit card for purchases is a matter of personal choice. I use both. When on an extended trip I don't want to worry about paying my credit card bill on time. Of course there are ways of getting around this. I can transfer funds over the internet between savings, checking, and credit card, but many people are wary of doing their banking on public computers.

I don't think there are any right or wrong answers here. Each to his or her own choice.

hopscotch - Merchants pay the same discount points, debit or credit.

Many ATM cards are for cash withdrawals and check guarantee only. Merchant banks make more money if people convert to debit because then they can make purchases.

Amex has the highest discount point structure of any card I accept.

bigal - I use debit cards because my brokerages offer them and give me lots of goodies that credit cards don't, such as zero currency markup and no cash withdrawal fee in addition to the usual assortment of credit card benefits. The complete list can be found at schwab.com If you want to use a credit card for cash advances and pay the fees, knock yourself out. It isn't a question of credit rating.

Hi, luli!

<<I realize this probably sounds very naive to all the experienced travellers>>

I'm the last person to deride you as naive: Before last year, I'd never used an ATM even in the US! (Go ahead, call me a Luddite.)

On trips, we just took dollars and converted them as needed (which entails some risk, and the irritation of waiting at kiosks). But I'd read here about the virtues of using ATMs in Europe, and last year we did it--it is more convenient than anything!

What we did to lessen debit-card-theft risk (however high it really is): We set up a dedicated checking account with only travel funds in it, protecting our "real" checking account. We paid no ATM fees with our debit card, only a 1% conversion fee--that would have been the same with a simple ATM card, I suppose, but that was the way we went.

Happy travels!

hopscotch,
Amex settlement takes about the same amount of time as Visa/MC. The funds get transferred directly into the merchant's account just like Visa/MC. A higher discount is the reason many merchants choose not to accept Amex.

Heimdall,
An ATM card offers the same convenience of being able to withdraw local currency worldwide without the risks of a debit card. But you're right, to each his/her own.

Robespierre,
Not sure what you're trying to say with that last comment. I asked why I'd want to risk A penny. Don't know where you're getting the idea that I'd keep all of my money in a checking account.

I meant if one has several sources of funds when one travels, it doesn't really matter if a worst-case scenario befalls one of them. Having a singular source depleted is a little more inconvenient.

Robespierre,
That I agree with, which is why I travel with an ATM card, a few credit cards, and some good ole USD as a backup when all else fails. Internet access also makes it easy to transfer funds around.

Going back to your earlier points about fraud protection, I'll make a few comments from personal experience. Often it's the card information, not the card itself that's stolen. If the card is still in your possession, it's impossible to know that anything's been stolen until actual funds have been withdrawn. And checks for unusual spending patterns didn't detect anything out of the ordinary on my account for a $1800 airline ticket charge ;)

ttt

Patty,

> "An ATM card offers the same convenience of being able to withdraw local currency worldwide without the risks of a debit card" <

And you are right about that. But as I said, whenever possible I use my debit card instead of checks these days. I can see the day when checks won't even be used anymore. To me an ATM card would be of little use.

"Hi, in Canada your bank card is your debit card for purchases and you use the same card at an ATM (Automated Teller Machine) to withdraw cash. My card allowed me to withdraw euros easily in Europe but I've heard not all do. Check with your bank that it can be used internationally and you'll be all set."

Like most people, you don't unmderstand what a debit card is. It is not an ATM card; debit cards existed long before aTMs. A debit card looks and acts like a regular credit card. The difference is that you are spending money from an existing account (like an ATM) and not credit. You can use it anywhere you can use a regular credit card, with a few exceptions such as auto rentals.

As people have said, debit cards are riskier than credit cards. The security is much looser since the the bank doesn't care if someone steals YOUR money. Unlike credit cards, you are on the hook for every dime stolen. Personally, I keep my debit card account to a $500 max in case of theft.

IMPORTANT! We just returned from Italy carrying both credit cards and a bankcard that is a combo ATM and debit card. Not good. We got robbed in Naples and within 15 minutes of the incident there was a $2,800.00 debit on our home bank account. Of course we immdeiately called to report the theft and cancel the cards and of course the bank has fraud insurance. But the hassle we have had to go through and the time involved in re-crediting our account strongly suggest that you carry only credit cards (we had no problem replacing those quickly and no liability) and/or just ATM cards. The latter are useless to the thief without a PIN.

Good luck and enjoy the trip but be cautious.

I guess that goes to show that Robespierre's theory that accounts cannot be drained through fraudulent use of a debit card is not quite correct.

Why the big hammer? I conceded that it can happen:

<b>Author: Robespierre
Date: 05/26/2006, 08:02 pm

Okay, I will concede that point.</b>

If your card issuer's daily and velocity checks don't limit the amount that can be taken from your account, your funds are unprotected. But AFAIK, that's very, very rare.

Remember that it's the <u>merchant</u> who has to eat fraudulent charges. It's difficult to imagine what kind of goober would run a $2,800 charge by an Italian using an American card. I really wonder whether it actually happened.

Robes...

I wasn't meaning to hammer you....you were quite dogmatic that it can't happen.

Actually, on a credit card about 5 years ago, I was nailed by a French internet provider for 4 $2,000 charges (total of $8,000 and change) from an internet provider...some of these guys work hand in hand with the swine from Eastern Europe and Nigeria pulling this garbage...

The fact is most experts admit, sheepishly, that the swine are always one step ahead of their attempts to end this garbage.

The Brits had thought they had solved the problem with the chip and pin cards and then we had the Shell episode where these swine swiped the card numbers and used them in ATM's outside the uK where the chip and pin are not checked...it was all over the British newspapers a couple of weeks ag.

As for me, thank goodness the $8,000 was on a credit card not a debit card (although I never have $8,000 in my credit card account but I do in my brokerage account where they are only too happy to want me to get a debit card)...2 phone calls, 1 letter and 1 notarized statement and that was the end of it.

Who was ultimately out the money? Who the hell knows and frankly who the hell cares; well I shouldn't say that as I know these fraudulent charges are one of the reasons card carriers have jacked up all sorts of fees but I don't pay any but I consider myself a relatively careful person and the number was stolen and the card cloned so it can indeed happen.

Credit cards...exactly that! The card issuer is paying the merchant cash for you. The merchant is charged a fee. If you repay the card issuer before a certain time the transaction is without charge (certain exceptions). The credit card company will charge a high rate for overdue payments. Some reports note that many card users carry huge debits! Read the fine print!
Debit or check card...Users are simply withdrawing personal funds. Fees depend on ATM owner and conversion costs.
Discuss matters with your card issuers. You should be able to set daily limits on what can be charged or withdrawn on YOUR cards.

Pls bear with me if these questions seem stupid to those of you who are savvy travelers. I carry an ATM card of a local Asian bank but it does have Plus and Visa Interlink logo at the bank. Will these work in ATM machines in Europe?

I have a Mastercard debit card and after reading this thread, I think it's safer to leave it at home provided my local ATM card will work in Europe.

And if debit cards are totally unsafe, what is safe then? Re: Patti's post above - can my credit card number ALONE be stolen and used without my knowledge? I use it all the time to purchase things on the internet and I guess that may not be the safest thing in the world. But I thought that at stores you have to physically hand over the credit card to make the purchases.

There are these credit card rings...they operate usually in Eastern Europe or in Nigeria. What they do is they get some moronic clerk and give him or her a little card reader...either out of your sight or whatever he runs the card through this reader as well as the regular card reader....from that information (the piece of slime doing this is usually paid something like $25/card) these gangs can duplicate the magnetic stripes on the back of the cards and use them either with cooperating or unknowing merchants.

The cards look legit...the magnetic stripes have the correct information and voila whatever is charged to you.

Unfortunately there is little you can do about it; these gangs are very sophisticated in what they're doing....there are fraud protections put into place that sometimes work and catch a fraudulent pattern immediately; for others it might take a few charges.

Now this whole discussion has centered in on those debit cards which are used as &quot;credit cards&quot; i.e. those with visa or mc logos on the front. To the merchant, it's just a mc or visa...to you it's a withdrawal from your checking account when it clears the system.

As noted it can happen to any card anyplace anywhere...if it's a credit card as noted it creates a bill which while may be a bit shocking, you can work with the bank get a new number and they eat the charges (or try to recover as noted from the merchant but if a legit card was presented then for the most part the merchant is in the clear)...if it is a debit card, the money will come out of your bank account. Now to try to get more acceptance of debit cards, banks claim you have the same protections ($50 maximum exposure for fraudulent use and for the most part, nobody really enforces the $50 rule and they eat the whole thing) but the question remains how long does it take for the money to be restored to your account and that is where the danger of debit cards lies.

&quot;if a legit card was presented then for the most part the merchant is in the clear...&quot;

Er, no. When a cardholder disputes a charge, the card issuer back-charges the merchant's account and sends a demand for a signature document to the merchant. If the merchant can't produce your signature (or proof that merchandise was delivered to you), he eats the charge.

The only time a merchant would knowingly submit a fraudulent charge is if s/he didn't plan to be in business when the chargebacks start arriving. See <i>Rogue Merchant Scenario</i>.

Yes, a debit card has all the normal features of your ATM, but with the visa or mastercard logo, you can use it at stores as a credit card, ie you will sign for your purchase and the amount is deducted from your checking account. If the store also accepts ATM, then you can use your pin number rather that signing for a purchase. A benefit of using the ATM function of the debit card is that once you input your pin code, the ammount is automatically deducted from you account. Sometimes, when using the credit card feature of the debit card, it can still take a few days for the purchase to clear in the bank.