The great boom in the international debit card industry doesn’t seem to pose any signs of halt as it has already overtaken the credit card industry in the race as the number one in electronic payments. The international debit card may in fact be described as the poor man’s credit card considering the fact that it provides almost all the benefits of a credit card at a very small fraction of the costs. But other than the rather enormous benefits one must also consider the great risks associated in using international debit cards. These risks may cost you a lot but they are considerably very easy to counter.
Some international debit cards are non-PIN protected and can be used even by just the holder’s signature. Since any signature is prone to forgery, these PIN-free international debit cards are very risky and anyone who gets a hold of your card and thereafter learns to forge your signature will be able to easily clean up your bank account. The solution to this risk is quite simple; only get international debit cards that are PIN protected.
International debit cards are indeed far riskier than credit cards. And the federal government has highlighted and clarified the gravest risks. Detailed explanations of the said risks are as follows:
Legally, your ultimate liability for fraudulent use of a credit card is generally only $50. And, when a credit card is fraudulently used, you are also only disputing whether you owe the bank money. Unlike a credit card, if your international debit card is used fraudulently, the thief robs your checking account. Potentially, all your money is drained out of your checking account. It could take the bank 10 days or more to investigate and refund your money.
Worse, unlike a credit card, under the law, your international debit card liability could be as much as $500, if you notify the bank more than 48 hours after you learn of the problem or even up to all the money in your checking account plus your maximum overdraft line of credit if you fail to notify the bank within 60 days. Under pressure from the state PIRGs, banks claim to have voluntarily limited international debit card liability to $50. PIRG has received complaints from consumers whose banks have not honored the well-publicized alleged voluntary $50 limit.
On lost credit cards, your loss is limited to $50 per card. On an EFT card, your liability for an unauthorized withdrawal can vary: Your loss is limited to $50 if you notify the financial institution within two business days after learning of loss or theft of your card or code. But you could lose as much as $500 if you do not tell the card issuer within two business days after learning of loss or theft. If you do not report an unauthorized transfer that appears on your statement within 60 days after the statement is mailed to you, you risk unlimited loss on transfers made after the 60-day period. That means you could lose all the money in your account plus your maximum overdraft line of credit, if any. Read more on
International Debit Card.