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Chapter 5

Use ATM and Debit Cards Wisely

ATM Cards
Financial institutions offer ATM cards to provide their account holders with account flexibility. An ATM card lets you to withdraw cash, make deposits, transfer money between accounts, check your balance, get a cash advance, and make loan payments at a day and time that is convenient for you.

Debit Cards
A debit card provides the combined benefits of an ATM card and a paper check. You may be able to use it at places other than your financial institution, such as a store or restaurant. Anytime you use a debit card, the money is automatically deducted from your checking account.

Even though it looks like a credit card, it is not the same, and will not provide you with the ability to postpone payment on a purchase. For some debit card transactions, processing may take a day or two. It is important to record the transaction in your check register immediately and assume those funds are no longer available to ensure you don't inadvertently withdraw money meant to be used for a debit transaction.

You may be charged a fee for ATM and debit card use. Ask your financial institution what type of fees they charge. When using an ATM that's not part of your financial institution's network, you will often be charged for the convenience.

Lost or stolen ATM/debit cards
Immediately report ATM/debit card loss or theft to your financial institution. According to federal law – the Electronic Fund Transfer Act – you cannot be held responsible for unauthorized transactions if you report the card missing to the financial institution before it's used without your permission. If unauthorized use occurs before you report it, your liability limit depends on when you report the loss:

  • $50 if reported within two business days
  • $500 if you do not report the loss within two business days
  • Unlimited liability if you do not report unauthorized transfers within 60 days after your checking statement showing the unauthorized use is mailed to you

Prevent Fraud

  • Never disclose your account number over the phone unless you know you're dealing with a reputable company.

  • Never put your account number on the outside of an envelope or on a postcard.

  • Draw a line through blank spaces on charge or debit slips above the total so the amount cannot be changed.

  • Don't sign a blank charge or debit slip.

  • Tear up carbons and save your receipts to check against your monthly statements.

  • Cut up old debit and credit cards - cutting through the account number - before disposing of them.

  • Open monthly statements promptly and compare them with your receipts. Report mistakes right away.

  • Never carry your PIN or write it on your ATM or debit card.

  • Never write your PIN on a deposit slip or other papers that could be easily lost or seen.

Continue to Chapter 6

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