Should I Sign or Use My PIN?
Debit cards are as popular as cash and even more popular than credit cards. But many consumers concede they know little about the way the cards work.

Every time I pay for a purchase with my debit card, the salesclerk asks whether I want to use my PIN or sign for the purchase. What’s the difference?? Stephanie Wilson of Brooklyn asked.

You can authorize a debit purchase by entering your secret code on a PIN pad or signing the sales receipt like you do when you use a credit card. Many stores allow you to select the method you prefer.

When you enter your PIN, it’s called an online debit card transaction. Some consumers say it feels safer to use a PIN than to sign the sales slip. However, some banks charge fees on PIN-based transactions. And in some cases, the transactions are not covered by the bank’s zero liability? fraud protection policy.

When you sign for your purchases, you create an off-line or signature-based transaction. The merchant may have to pay a higher processing fee, but you may have greater protection in the event of fraud or errors. Since debit card policies vary, ask someone at your bank to give you a full explanation.

Debit cards, like credit cards, can be used fraudulently and should be protected like cash, since a thief could wipe out all the money in your checking account as well as any overdraft line of credit or savings-linked overdraft protection that you have.

There are fewer consumer protections when you use a debit card rather than a credit card, so avoid using debit cards for purchases on the Internet or by mail or phone. You?ll have a harder time disputing billing errors or the cost of undelivered merchandise?and you?ll have to fight to recover your own money.”

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