Last updated on March 12, 2003
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CREDIT CARDS
Charge and Debit Cards
Charge cards
Travel and entertainment cards, such as American Express and Diners Club, are charge
cards, not credit cards. You are expected to pay their bills in full within a specified
time period. If you don't, you'll be penalized. Membership fees for charge cards are higher than for bank-issued cards, and the kinds
of service they offer -- an annual accounting of charges, traveler's checks, cash in an
emergency -- are commonly available with credit cards, too, especially gold or platinum
cards.
You may be able to get a bigger credit line with a charge card, but they're not as
widely accepted as Visa or MasterCard.
Check cards
A check card -- also called a debit card -- appears to work the same way as a credit
card: The merchant swipes the card and off you go without any cash actually changing
hands. But that's where the similarity ends.
When you use a check card, the amount of your purchase is deducted from your checking
account.
It's useful to think of a check card as a paperless check that clears immediately, with
no grace period.
Check cards are accepted almost anywhere a credit card is, such as gas stations,
restaurants, grocery stores and department stores. But check cards can pull double duty,
acting as an an ATM card, too. You can make a withdrawal or deposit or scan your balance
at an ATM machine using your check card.
Safeguards against loss or theft and unauthorized use of your check card aren't as
strict as they are with credit cards. By law, you're liable for the same $50 as with a
credit card, but only if you report an unauthorized transaction within two business days
of discovering it.
Miss that deadline and you're legally responsible for up to $500. But MasterCard and
Visa voluntarily limit check-card liability to $50 and will waive it entirely in many
cases.
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Charge and Debit Cards
