Tuesday, October 16, 2012

Credit or Debit?

Last Thursday was mall lunch day.  As usual, we all went through the lines at various businesses in the food court.  I chose pizza that day.  Boy, was that expensive pizza!  Actually,  before I even received my receipt I heard the clerk make some funny gasping sounds.  She seemed pretty upset and then finally explained to me the problem.  She'd accidentally charged me over $800 for my meal!  Yikes!

I had used my debit card for this transaction so she then had to figure out how to issue a credit.  That took some time but she finally managed to do it and gave me that receipt as well.  I was surprised by all this because I thought our debit card had a $300 daily use limit anyway.  I'm not sure but maybe it is because she ran our debit card as a credit card.  I don't know.  Anyway, I didn't throw a fit.  It looked as though she'd reversed everything so I assured her all was well.  She really was more upset than I.  She then ran the transaction for the proper amount and I went off to eat my lunch with my family, telling them of my little adventure.

Do you use a debit card much?  I love the simplicity of it!  I am careful, though.  For instance, if we are eating in a restaurant where they take your card from you at the table and go to a back room to run it, I will only use cash or a credit card.  Why?  Because stuff happens.  I don't want my debit card out of my sight.  As far as I know it wouldn't be more likely to happen with a debit card than a credit card but the repercussions can be more difficult to manage.  

If there is a problem with a credit card, I am pretty confident it will be corrected...eventually.  We've experienced a couple of cases of credit card fraud years ago.  The issuing bank always fixed it for us with no problems.  Actually, it was the credit card company that found one of the errors and reported it to us before we even knew it occurred.  It was some company far away that set off some sort of alarms with the fraud department of the credit card company.  I even had our credit card company fraud people call me on a Christmas morning  regarding a charge they were investigating.  As it turned out, it was a gift I'd ordered for one of our boys.  I asked why that one made them suspicious and it was because they'd had a lot of fraudulent charges of that item in particular.  Anyway, I figure if someone does something bad with a credit card I will have some time to deal with it.

If someone uses our debit card fraudulently I assume the bank will work it out as well.  However, in the meantime it could cause a lot of problems.  For example, it someone used our debit card for a large amount, that amount would immediately be taken out of our bank account.  Even if it is later put back in, during the interval time that money would not be available to us.  We may unknowingly write checks that bounce or have the card rejected when getting groceries or something.  So, I only use it when it stays in my sight, never online or over the phone either.

Well, in the situation of my expensive lunch, I thought the immediate refund would balance it all out.  I learned something new.  Although the clerk put through the credit on that gross overcharge only minutes later, $843.43 was immediately noted on our account as a pending transaction.  Although it didn't ever really go through, that amount was deducted FOR THREE BUSINESS DAYS!  The credited amount did not appear at all until the third day.  I go online and peek at our bank account frequently and I'm glad that I did so that I could adjust as needed!  On day three, everything went through, the refund negated the charge and the drama was over. 

What I learned from all of this is that when your card is used, even though it appears on your account right away, a company has three business days to put it through in its final form.  That is useful for things like renting a hotel room.  The hotel can put the charge through as a pending amount, to be certain your card (debit or credit) will cover the room charge.  However, they may need to change the final amount if you charge room service, a movie or something more on the card.  Or, if using a card for a meal a restaurant may run it through for the cost of the meal to be certain it will be covered.  When you sign for it, though, you may choose to add the tip amount on the bill.  They have up to three days to go back in and adjust that total.  It all seems kind of messed up to me but that's the way it is.

Have you had any weird problems with a debit or credit card?  It can happen with checks as well.  Once, several years ago, Mike's paycheck wasn't applied to our account when we deposited it.  Although we had a receipt, something weird happened at the bank.  We were oblivious to the problem as that was before I could go online and check our account regularly.  That was quite a mess before it was all resolved!

So, here's my banking advice for you.... pay attention.  That's it.  That's the advice.  Just pay attention.  Look at your receipts, check your accounts regularly and report any problems.  That's all the financial advice I have for you.  

If you want real financial advice, including a FREE investment plan,  visit Financial Tailor.   


Maria Rose said...

One of my paychecks bounced...so then all of my bill payments bounced (back during undergrad when my cash cushion was nil). I went on a rampage and made my boss pay all of the bounced check fees and to write a letter on explanation for me to include with each payment as most of my bills were local.

Allen said...

Great advice but what did I expect from you. Debit cards are easy to use but I hate reconciling the check book.

Anne Marie said...

Chad recently had this happen to him, but he didn't notice at the time. He was too busy gabbing with the clerk. Later that evening, I was checking something else on our account, and nearly had a heart attack when I saw what our account balance was. Fortunately, it didn't completely wipe out the account, but it did come very close! The store actually called early the next morning, before we had a chance to call them, had put the credit through, and apologized for the mistake. They noticed it late the evening before when they were doing the books. Yikes!

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