Bad Credit Debit Card

Credit Card vs. Bad Credit Debit Card

For individuals that have had credit problems in the past, a debit card may be the solution to the problem of obtaining a credit card.

There are a few basic differences between debit cards and credit cards. While the cards may look identical, regulations and the way that they are used, can vary.

Fraud

The most significant difference is credit card regulations. While those who use a credit card are generally liable for the first $50 of fraudulent charges on their account, individuals who have fraud on their debit card may be liable for up to $500 in charges.

If you notice your debit card is missing or your account has questionable charges on it, report it immediately. The longer you wait, the more you may be held liable for.

A bad credit debit card is essentially just like cash though, and needs to be protected as such. If there are fraudulent charges on your account, you may have to agree to press charges against the unauthorized user, which requires a police report. This is because someone stole cash from you. The bank that issued you the debit card will investigate fraudulent charges on a credit card and they will also press charges against anyone who used your account without authorization. Whether or not the money is provisionally credited to your account before or after the investigation is completed is up to the individual bank.

Credit card fraud is treated a little differently. If you have a lost or stolen credit card you will report it immediately to the issuing bank. They can process a chargeback to the merchant who accepted the lost or stolen card. Any unauthorized charges are usually credited to your account right away. Odds are pretty good that you'll never have to file a police report unless your wallet or purse was stolen. If it can be determined that a merchant knowingly accepted a lost or stolen credit card because they didn't follow verification procedures the credit will stay on your account. The bank may even take a loss, even if the merchant acted properly, and leave the credit on your account.

POS Transactions

Another difference between credit cards and bad credit debit cards is the way POS, or point of sale transactions, are treated. When you use a pin number for your transactions, the funds are immediately withdrawn from your account. These are considered on-line transactions. Transactions that you designate as a credit transaction, where you don't enter a pin number, may not appear on your account for 2-3 days. These types of transactions are considered off-line. It is important that you save all of your receipts to reconcile your account if you use your debit card as a credit card regularly.

Using a Bad Credit Debit Card

Unlike a credit card, a debit card can be used like cash. This means that even if you have bad credit, a debit card can be used to make cash withdrawals. Any ATM machine that has the Visa or MasterCard logo on it can be utilized for cash withdrawals.

There is no need to carry traveler's checks when you have a bad credit debit card. The debit card can be used at a variety of merchants both in the United States and abroad. Debit cards can be used anywhere the Visa or MasterCard logo are displayed.

You can also forget about carrying around several additional forms of identification when you use a debit card. As long as you are using a pin number for your transaction, you will never be asked to provide identification. Occasionally when you use a debit card as a credit card you may be asked to show identification to compare signatures. This is for your benefit, as the bank wants to be sure the owner of the card is the one using it.

Conclusion

Anyone can get a debit card, even those with bad credit. A bad credit debit card can be used just like a credit card, which can be useful for online transactions such as renting a car or buying an airline ticket. Debit cards can also be used anywhere the Visa or MasterCard logo is shown, including many international merchants. Contact your bank's fraud liability policy before you begin using any debit card. Finally, remember a debit card is linked to your checking account- if fraud occurs it may drain all of your funds.