Cutting Debit Card Costs
Courtesy of Dynamic Mutual Funds, Posted 20 Oct 2014
Canadian consumers are in love with their debit cards. In fact, over $156 billion was processed through Interac's direct payment systems in 2007 – the second highest activity in the world after Sweden.
But do Canadians know how much the convenience of debit cards can cost? When I first made the transition to using debit more than cash, I was paying some hefty fees for the convenience of being cashless. But there are lots of ways to cut down on the costs of debit cards.
Some specialty cards, for example for students, offer free everyday banking. Some bank accounts also offer free everyday banking if you keep a minimum balance. You can also pay for a fee package. Another way to cut costs is to ensure when you are taking out cash to go to your own bank's Automated Teller Machine (ATM). If you don't, you could pay an added surcharge. You can also use your local grocery store as a free withdrawal location. When I use my debit card on weekends to pay for groceries I always get cash back to last me through the week.
Debit cards may be convenient, but are they safe? My husband and I have already been victims of debit card fraud. When we noticed two suspicious $500 withdrawals from an ATM machine on the other side of the city we called our bank right away. After signing off that we hadn't made the withdrawals, we got the transactions reversed. If you are a victim of debit card fraud, you may be protected by the Canadian Code of Practice for Consumer Debit Card Services. According to this code, you should not be held responsible for any fraudulent losses resulting from circumstances beyond your control including unauthorized use. However, you will be held responsible for the loss if you contribute to the unauthorized use of your debit card by disclosing your Personal Identification Number (PIN) to someone or even writing it on the card or having a written record of the PIN near the card. You may also be responsible for the loss if you don't notify the issuer within a reasonable time that the card has been lost stolen or misused or that the PIN may be known to someone else.
Here are some steps you can take to protect your financial information:
- Change your bank machine, telephone and online banking passwords on a regular basis
- When you select a new PIN or password, choose one that is difficult for someone else to guess. Avoid using names, birth dates, addresses or phone numbers; sequential or repeated numbers, or zeros
- Use your hand or body to shield your PIN when you are using a banking machine or your debit card in a store
- Never disclose your PIN to anyone. Memorize it. Don't keep a written record near the actual card