January 23 , 2008
The general advice from financial experts is to use your debit card for things
you would normally pay cash for, for example fuel or grocery shopping. Using your debit card is fast and quite often convenient, but always be aware that any card use does come with an element of risk with regards to card cloning and identity fraud.
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When using your debit card, ensure its safety at all times. Regularly keep an eye on transactions occurring within your account and keep a particular close watch on any transaction you know you did not carry out.
It is not widely recommended to purchase either very expensive items or make online purchases with debit cards. Of course, in the event of your card becoming lost or stolen, please do report it immediately.
For larger purchases or online goods, it is better to use a credit card. The reason for this is, it is much easier to dispute unfamiliar/unauthorised charges or fraudulent purchases. This is backed up with the Consumer Credit Act of 1974 which covers personal loans and other credit agreements, protecting your consumer rights.
One example of how it can help is when making any purchase under £30,000 with your credit card, you are entering into a contract with both the vendor and the card issuer. These two groups now have equal liability, so should anything go wrong, you can claim either of them for some form of compensation.
One situation where this is particularly useful is, say buyng on the internet and
goods either do not arrive or turn up damaged, or worse yet, a company you are buying from goes bust. A debit card would not offer you any security in this
situation, unlike a credit card.
An important point to note also, is that the legislation is still applicable even
if you only make a part-payment with your credit card, say the deposit. Your rights remain unaffected.
Certain credit cards also come with the added bonus of free purchase protection. Normally this means that you are covered for up to 100 days from purchase date against any lost, damage or stolen goods purchased on your card. This is not a feature offered by all firms, so check and see if your card provider is one who
Some other ‘free' benefits offered by some card providers can include ‘free'
extended warranties, ‘free' travel insurance (just remember to read the small print for what is covered), and some even offer ‘price protection'. This is when you purchase an item and find it cheaper within a certain time frame, some card companies will refund you the difference.
Another (far less known) way to make your purchases is with a pre-paid card! This is a very easy and safe way to manage your money.
The card looks very like any other debit or credit card, however it is pre-paid and you can add to it without any further charges. This is ideal for anyone who is trying to control their finances and stick to a budget. It is also perfect for people who do not like to pay late payment fees yet who are not very good at remembering to pay things on time. This card is also suitable to make online purchases, and comes with all the protection of a credit card.
Another appealing factor to the pre-paid card is that even someone with poor credit history is welcome, and since it is pre-paid, there are no credit checks and you don't even need to have a bank account!