A large majority of American households now have debit cards, also known as check cards, but not everyone understands all the “bells and whistles.”  The Better Business Bureau encourages consumers to know how debit cards differ from credit cards and to use them responsibly.
 
Debit cards may resemble credit cards, but they operate like cash.  When you use a debit card, your money is quickly deducted from your bank account, assuming you have sufficient funds.  There is no grace period.  In addition, you may be charged a fee per use of the card, and the amount of money you can debit per day or month may be capped.
 
Like credit cards, debit cards offer a convenient alternative to carrying cash or checks, and are widely accepted by merchants.  The similarities end, however, if your debit card ends up lost or stolen.  If your credit card is stolen, your liability is limited to $50.  If someone uses your debit card without your permission, you could lose much more.
 
Your losses will depend upon how quickly you report the loss and whether your financial institution offers protection above that required by law.  If you report the loss within two business days, government regulation restricts your liability to $50 of unauthorized use.  If two business days pass, but you report the missing card within 60 days after your statement is mailed, your liability is limited to $500.  If you report an unauthorized transfer following that 60-day period, you could lose all the money in your account and overdraft line of credit. 
 
To use your debit card responsibly:

• Know where your card is at all times.  If you misplace it, contact your financial institution or card issuer immediately.
• Choose a Personal Identification Number (PIN) that is different from your address, telephone number, Social Security number or birthday.  Do not write the PIN on the card sleeve or on papers that you carry in your purse or wallet.