Wednesday, June 10, 2009

Another Reason to Use Cash

Over the Memorial Day Weekend, one million Starbucks customers were overcharged. Those overcharged used their debit cards were charged twice. Their receipts were correct but the money was taken out of customers bank accounts twice. Starbucks has since reimbursed most customers but some customers have not yet been reimbursed.

This event is even more reason why it is so important to verify your bank accounts. The fee for an overdrawn bank account ranges from $29-$35 depending on the bank. Also, you risk the chance of having the overdrawn account reported on your credit report which can lower your credit score. It is better to pay for items with cash instead of using a debit or credit card for everyday purchases. Here are 4 ways to ensure you are not overcharged when using a debit card.

1. Read the agreement. Read the policy agreement for your debit card to determine the course of action if you are overcharged on your account.

2. Reconcile. Verify your bank accounts weekly if not daily. Keep all of your receipts and verify them with your monthly statements to check for errors.

3. Use like a credit card. Use your debit card for occasional purchases or for unexpected expenses.

4. Pay with Cash. Pay for items with cash. You don't have to worry about having an overdrawn account. This also helps you to be more accountable and spend less frequently. There is something about a swiping a card that makes consumers want to spend.

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