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For Safety’s Sake - Choose Credit Not Debit


(Clinton, NJ) When opening a new checking account, banks regularly offer bank cards to their account holders. These cards can be used to withdraw money at Automatic Teller Machines (ATMs) or as a payment alternative at any establishment that recognizes and accepts major credit cards.

Most consumers welcome these bank cards as a convenient means to obtain cash and to pay for anything from a cup of coffee to big-ticket items in warehouse outlets. What they don’t realize is that using their bank card as a “debit” (ATM) card carries risks and the potential for fraud and abuse that is eliminated when they use the card as a “credit” (Point of Sale or POS) card instead.

The problem is that most consumers aren’t aware that they can use their bank card as a “credit” card, with none of the fees, charges or accumulation of debt associated with a bank-issued major credit card. In fact, when consumers use a bank card as a “credit” card to pay for an item, the payment is applied to their account in the same manner as an actual debit transaction. However, there is one critical difference – a “credit” transaction is covered by the Visa or MasterCard fraud detection and prevention network that stands behind every Visa or MasterCard bank-issued card. Using a bank card as a “debit” card bypasses this protection, eliminating this additional layer of security.

“Today’s criminals are very tech-savvy. They have to be just to keep up with ever-changing technology,” commented Unity Bank Executive Vice President/Chief Operations Officer, John Kauchak. “For example, they can insert a card skimmer into an ATM card reader during off-peak hours, when no one is watching. Then, when customers access the ATM, the skimmer captures their bank card information and a hidden camera, focused on the key pad, captures their Personal Identification Numbers (PIN).”

These high-tech hackers remove the devices before start of business the following day and no one is any wiser that this type of illegal activity has taken place. Compromised cards can then be duplicated and/or used for Internet purchases, without the cardholders’ or the issuing bank’s knowledge. It isn’t until a cardholder sees charges that they don’t recognize that the bank becomes aware that the card has been compromised in some way.

Many consumers access cash through debit and ATM withdrawals. However, nearly every retail establishment, restaurant, grocery store chain, gas station and convenience store accepts POS or bank-issued credit card payments; therefore, they can also accept bank cards for credit, rather than debit, payments.

It’s important that consumers know that some retail outlets automatically default to “debit” when customers swipe their bank cards. Customers can “cancel” out of the debit transaction to select the “credit” option instead. Whenever a bank card is used as a “debit” card to make a purchase, the customer’s card information and PIN are stored, opening the door to potential security risks and breeches.

“When one of our account holders questions a fraudulent bank card “credit” transaction on their statement, they’ve usually had to enter their signature at the time of payment,” added Kauchak. “If the signature on the transaction doesn’t match the cardholder’s signature, the cardholder is covered by Visa/MasterCard regulations and is not liable for the charge. Using the “debit” option doesn’t afford this same level of protection and the bank may not have to reimburse any of the disputed amounts.”

When making purchases via the Internet, consumers also are advised to select “credit” rather than “debit” when entering their bank card information. The purchase will appear as a “debit” on the holder’s account, but the transaction will receive the same Visa/MasterCard regulation protection as a bank-issued Visa or MasterCard.

Consumers can even use their bank cards internationally, as either “debit” or “credit” cards, but when they are used as “credit” cards, they retain the same fraud protection backing of the Visa/MasterCard networks. This allows cardholders to make secure purchases in foreign countries, without having to walk around with large sums of cash, or to get cash if they really need it.

According to Kauchak, “Some banks have even begun to offer Rewards Programs for using bank cards for POS transactions. At Unity Bank, we have instituted the innovative ‘UChoose Rewards’ program that allows account holders to earn points for every signature-based “credit” transaction they make using their bank cards. As they accumulate points, they can redeem them with participating retailers, both online and in-store. This program matches programs offered by the large credit card issuing banks, but without the interest, minimum monthly payments and accumulation of debt that goes hand-in-hand with those programs.”

Consumers should also be aware that using their bank cards as “credit” cards is more secure than check writing or “pay by check” through the Internet, again because of the security measures in place with Visa/MasterCard networks.

Unity Bank has branches in Hunterdon, Middlesex, Somerset, Union and Warren counties in New Jersey, and Northampton County in Pennsylvania. The bank began as First Community Bank in 1991 with two branches and thirty employees. It now has over one hundred and sixty employees.
For more information about Unity Bank, call Rosemary Fellner at 800.618.BANK (2265), or visit
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