I previously covered the differences between credit and debit cards. Now the Consumer Financial Protection Bureau has finalized new rules for debit cards that are effective October 1, 2017. Some business groups and pro-business politicians are trying to hamper the newly created agency that aims to protect consumers, but these new rules should provide many protections for debit cards, mobile wallets, and person-to-person payment systems that are similar to credit card protections.
The new rules provide more fraud and overdraft protection and require that fees be more clearly explained. It’s common for debit cards to have monthly and ATM fees, but you really need to review less common fees more closely such as fees for customer service, overdrafts, and account queries. If you card is lost or stolen, you can limit your loss to $50 if you notify the back within two days.
Shocking stories of overdraft charges when your purchases exceed your card balance, such as fees that exceed the amount of the overdraft itself, have been common in news stories. These new rules should make it easier for consumers to handle overdrafts, but this is an area that debit card users should review carefully. Some debit cards decline a purchase when it exceeds the account balance, but some allow overdrafts for fees. Get the card’s mobile app and review your balance before you make a purchase that is close to your account balance. Avoiding debt is a prime reason to use a debit card instead of a credit card. They can be a great way to stay within your budget since you generally need to load money onto the card before you can spend from it.