Thursday, April 7, 2011

Store Branded Debit Cards

There is a new trend out there for stores to offer their own debit cards.  There are some important differences in the way these cards work. You should understand those differences before getting one.

You Can't Dispute a Transaction Through YOUR Financial Institution

When you sign up for one of these cards, the card is issued by the retailer's financial institution, not your financial institution.  The purchases with these cards are sent as an electronic debit to your checking account at your financial institution.  

Therefore, if an unauthorized debit comes through to your checking account, you must go back to the retailer and deal with their financial institution to straighten out the problem.  Since you have no relationship with that financial institution, this may be a difficult and complex process.

Protect Yourself
  • Be aware that the cards do not function in the same way as the debit cards from your financial institution
  • Make sure to read and understand the contract - know your responsibilities
  • Understand how you will need to dispute unauthorized transactions and the complexities involved in that
  • Notify your financial institution when there is an unauthorized debit
Please comment if you have had experience with these types of cards, or let us know if you find the information useful.  We appreciate your feedback!

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