International Debit Card Realities
April 28th, 2010 | 
Author: International Debit Card Realities
The worsening state of world economies due to the onslaught of the global financial crisis has helped bring international debit cards to the spotlight. With all the benefits of international credit cards but without the act of indirectly borrowing money when making purchases with them international debit cards are now gaining worldwide recognition. Not to mention that international debit cards with an offshore primary account that is completely safe from being frozen these are indeed the new trend in handling finances.
There are certain realities about international debit cards that cannot be ignored. And only with knowledge of these can a holder make use of his cards full potential and avoid making mistakes in its use. Three realities are given below to help people understand more about international debit cards.
Consumer Protection
There are various protections methods employed by international debit card providers. Visa and MasterCard the two main symbols of the debit card industry for example forbid minimum and maximum purchase sizes surcharges and arbitrary security procedures on the part of merchants. The providers usually charge higher transaction fees to merchants for credit transactions since they have more chances of being associated with fraud than debit network transactions. This may lead them to “steer” customers to debit transactions. Consumers arguing charges might find it easier to do so with a credit card since the money will not be leaving their control immediately.
Fraudulent charges on an international debit card can also cause problems with a checking account because the money is withdrawn immediately and may thus result in an overdraft or bounced checks. In some cases debit cardissuing banks will promptly refund any disputed charges until the matter can be settled and in some jurisdictions the consumer liability for unauthorized charges is the same for both debit and credit cards.
Any fees that the customers have to pay to their banks are the same in spite of whether their transactions are conducted as credit or as debit transactions so there is no advantage for the customers to choose one transaction mode over another. Shops may add surcharges to the price of the goods or services in accordance with laws permit such actions. Banks consider the purchases as having been made at the moment when the card was swiped regardless of when the purchase settlement was made. Not considering of which transaction type was used the purchase may result in an overdraft because the money is considered to have left the account at the moment of the card swiping.
Financial Access
Debit cards and secured credit cards are popular among college students who have not yet established a credit history which is very likely as students usually have no records of debt or loans yet. Debit cards may also be used by expatriated workers to send money home to their families holding an affiliated debit card.
Issues with Deferred Posting of Offline Debit
To the consumer a debit transaction is perceived as occurring in realtime. However when a purchase is made using the credit debit option the transaction merely places an authorization hold on the customer’s account; funds are not actually withdrawn until the transaction is reconciled and hardposted to the customer’s account usually a few days later. However the previous sentence applies to all kinds of transaction types at least when using a card issued by a European bank. This is in contrast to a typical credit card transaction; though it can also have a lag time of a few days before the transaction is posted to the account it can be many days to a month or more before the consumer makes repayment with actual money.
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