November 17,2008
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Online Consumers Credit Card Tips, Pt.2 --
– Debit cards.- Credit Cards (cont.):
- Withhold Payment: If a resolve is not reached, the consumer's credit card is not charged until a final decision is arrived at. If the merchant does not cooperate and a decision favors the consumer a ‘charge-back' is levied against the merchant, which can include further penalties against the merchant. Nearly all merchants realize this and are more willing to settle up to avoid charge-back penalties.
- Debit Cards:
- Unauthorized Transactions: These can occur for the same reasons as listed above for credit cards. However, the liabilities can be very different. If the consumer reports the unauthorized charge to the issuing bank within two business days, then the consumer's liability is only $50. However, unlike credit cards, if the disputed charges are not reported to the issuing within two business days but are reported within 60 days, the liability becomes greater with time. It can grow as large as a $500 liability within that time. After 60 days, all bets are off and the consumer is at the mercy of the issuing bank.
- Disputing a Charge: Disputing a Charge: Unlike credit cards, when using a debit card and a deal goes sour, the money's gone. Even if you return the product to the merchant, the money is now in the merchant's hands. You are now at the mercy of the merchant.
- Withhold Payment: The same goes for withholding payment. You are now at the mercy of the merchant.
- Flat busted: One further hazard of debit cards not found with credit cards is that, if a debit card is maxed out, either by accident of a clerk of by fraud, your checking, savings or other accounts attached to the debit card can be depleted. You are flat broke. Even if you eventually get is resolved, until you do, your account is at zero. Hopefully, you have some cash stored away or a rich friend.