What Is A Check Card?

What is a check card? A check card is an instrument to electronically access funds in a Demand Deposit Account. "A check card is an instrument to electronically access funds in a Demand Deposit Account....

"A check card is an instrument to electronically access funds in a Demand Deposit Account. The term check card is a generic term for this type of instrument: says Gwen Evans, a banking expert with ten years experience." She describes a Demand Deposit Account as a regular checking account, from which a depositor may withdraw funds immediately without prior notice

Check cards are basically replacements for checks, hence the name check card. It can also replace cash and credit cards as a form of payment in retail and service establishments. A growing number of consumers use check cards because they eliminate the hassle and risks of writing checks or carrying large amounts of cash. Unlike automatic teller machine cards that require you to enter a personal identification number (PIN), this type of debit card often looks a credit like credit cards and carry a MasterCard or Visa logo. When used as a credit card, a PIN number is not required and can be used very easily at any cash register that accepts credit cards. The money for the transaction is immediately transferred from your checking account unlike a credit card where the money is deducted from money you do not already possess.

There is a downside to using check cards. The buyer will have less bargaining power with purchases when using a check card instead of a credit card. With a credit card, the buyer has the right to, later, refuse to pay for the purchase if the buyer is n satisfied. With a debit card, since the bill for the product or services has already been paid, the chance of having bargaining power with the merchant is lost.

Because the check card is connected to a consumers checking account, if a thief gets hold of a persons check card -- or even just the account number on the debit card -- they can clean out the connected account along with any overdraft protection. That may also mean that outstanding checks already written probably by the victim will not clear. In most cases however, if theft is promptly noticed and reported, the bank will credit the account within a few days at most. In case of theft, or fraud, the victim's liability is limited to $50 when the loss is discovered and reported within two days, any longer and liability can possibly go to $500. If discovery and reporting of a theft takes longer than 60 days, the bank is not responsible and the victim will probably not be compensated for any losses.

Unfortunately, using check cards can create a culture of lazy banking. People rarely balance accounts anymore, under the assumption that if the money has not been debited, then it has not been spent. If a merchant is slow in submitting receipts however, money can be returned back into the account creating a false balance. Once the receipts are submitted, the money is debited from the account again which may cause "bounced check" fees, and overdraft charges. Therefore, consumers must be sure to keep track of receipts and deduct the dollar amounts of all purchases purchase from your bank balance immediately.

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