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Don’t Use Your Debit Card?

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  • Description

    John Ulzheimer of Smartcredit.com breaks down the dangers of using a debit card.

  • Duration 3:48
  • Date

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This transcript is automatically generated

Banks may have given -- on debit card fees but the dangers to consumers -- -- not gone away.

These are just the tip of the iceberg here to discuss the -- your debit card issuer isn't telling you know I don't -- -- president for consumer education it's -- credit dot com okay.

I love everything debit card you say that the cards are more costly than credit cards health so.

They are definitely more costly Jerry and here's how.

Do you remember our a couple of years ago now land that the loss said that everybody in the US is going to be opted out overdraft protect yeah he valued.

-- would you believe that some 30% of the people who opted out.

Opted back in last year they didn't -- to get a debt.

I'll while they were aggressively marketed sale and were were shared -- benefit -- overdraft protection so guess what.

Those folks who are using -- card that are now and current goes over debit fees now.

Compare that to it rewards credit card with no annual -- you pay off in full every month that's also a cash -- -- If you balance the cost of hearing those two pieces of plastic it's actually cheaper to carry that credit card.

And you have to be careful and manager wisely but at the end of today it's -- a lot of up for a lot of reasons -- OK people think the debit cards improve your credit score.

Sure I had -- that's absolutely.

Without a doubt 100% false and here's why debit card is a checking product.

At the plastic check.

And checking related products and services do not show up on your credit reports and the only thing -- can help your credit score are things that show up on your credit report and so it -- trusted him but for the prepaid card issuers.

Kind of wraps of the industry and those are the guys who actually like this -- being out there because this is one of the ways that they market their products.

Is that it can somehow help you credit by actually using these thanks there is no free checking.

-- preach bottom leaving I'm not familiar that term can you tell me what that means place yeah free -- free checking it really hasn't been a victim of Dodd-Frank to be quite honestly if you could cap.

All I'm behind on the data cards like these was really the straw the broke the camel's back.

Free checking has been an endangered species for sometime now you can still find it -- credit unions if you don't they're somehow hoops with minimum deposit requirements.

Direct -- directs -- payment of such.

But really it's really hard to find its unfortunately gonna be going away almost like the Dow would have barred RA -- credit cards instead we mean by that.

While the stock you have more protections under the fair credit billing act and you have another electronic funds transfer act so using credit card -- him more protections.

Four for fraud related issues.

-- off.

If someone steals your debit card or steals your credit card -- who are you gonna call first -- got a call your debit -- -- -- first why because that's your money.

You're not gonna call credit card -- -- because that's someone -- not.

Right exactly.

Credit cards aren't -- easier to get.

Ice funniest this is to say -- right now they are actually becoming easier to get.

Credit card for more difficult to get from 2007.

-- -- -- middle of last year because obviously the credit crunch and economy in such.

Debit cards are much easy -- there are a reasonable alternative as a piece of plastic.

Now not so much the credit card pressures are actually digging deeper into the risk wall which means that it's gonna be easier to get those or.

With getting a debit card and at the end of the day you balance all these things out and you try to think rationally about -- that it gives -- -- one of these people it's -- -- relationship what they're -- a part you'll realize that the -- -- -- credit -- not it is actually the better piece of plastic that you.

Hi John I think these are great insights and I really appreciate your bringing -- to our viewers it interesting stuff contrary to what a lot of people think thank you sir.

You that.

Well will be.

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