Credit and Debit Card
Pro arguments: The usage of debit card is continuously increasing. Because of the crisis of the economy, tighter credit and consumers become more careful in spending money; more people prefer to pay with debit cards nowadays. According to the Nilson Report, Americans made 28.4 and 21 billion purchases respectively using debit and credit card in 2008. In 2009, the total credit card purchase transactions went down 4 percent; it was recorded as $20.2 billion. However, the total debit and prepaid card transactions in U.S. was $36.2 billion, an increase of 8 percent.
(http://www.creditcards.com/credit-card-news/credit-card-industry-facts-personal-debt-statistics-1276.php, last accessed on April 1, 2010)
Provide higher level of security protection for debit card. Debits cards offer lower levels of security protection comparing with credit cards. Same as cash and checks, customers are not protected under Federal regulations when dispute over goods and services appears. They only protect credit card users. When consumers report loss of debit cards or fraud within two days, the Federal Electronic Fund Transfer Act will limit their liability to $50. However, the liability will rise to $500, if they report the issue after two days but no longer than 60 days. If they take longer than 60 days to report, customers will be liable for the total loss. (http://straighttalk.corningcu.org/reports/remars-report/check-credit-card-or-debit-card-choosing-a-payment-method-for-security-and-convenience.html, last accessed on April 1, 2010)
Avoid overcharging of service fees. Banks and credit unions make profit in charging service fees. Bank of America charges $35 for every overdraft above $5. Wachovia charges $22 for the first overdraft in a 12-month period. Then they will collect $35 for each overdraft. Some of the banks and credit unions even charge usage fee for every debit card use at certain stores. Compare with credit card, debit card issuers do not inform the
(http://www.creditcards.com/credit-card-news/credit-card-industry-facts-personal-debt-statistics-1276.php, last accessed on April 1, 2010)
Provide higher level of security protection for debit card. Debits cards offer lower levels of security protection comparing with credit cards. Same as cash and checks, customers are not protected under Federal regulations when dispute over goods and services appears. They only protect credit card users. When consumers report loss of debit cards or fraud within two days, the Federal Electronic Fund Transfer Act will limit their liability to $50. However, the liability will rise to $500, if they report the issue after two days but no longer than 60 days. If they take longer than 60 days to report, customers will be liable for the total loss. (http://straighttalk.corningcu.org/reports/remars-report/check-credit-card-or-debit-card-choosing-a-payment-method-for-security-and-convenience.html, last accessed on April 1, 2010)
Avoid overcharging of service fees. Banks and credit unions make profit in charging service fees. Bank of America charges $35 for every overdraft above $5. Wachovia charges $22 for the first overdraft in a 12-month period. Then they will collect $35 for each overdraft. Some of the banks and credit unions even charge usage fee for every debit card use at certain stores. Compare with credit card, debit card issuers do not inform the