Debit or Credit – Know Your Rights!


A recent story about the sudden closing of the USA Baby store in South Austin reminded us of an important difference between credit cards and debit cards that is not well known by consumers.  The story briefly mentions, but does not explain, this difference.  According to the story, Nikki Cockrell, a customer who had ordered furniture from the now-closed store, received a letter from the company explaining the closure.  Cockrell says according to the letter, the store may give refunds to customers who paid with cash or a check.  Those who paid with a credit card need to check with their card company and those who paid with a debit card may be out of luck. Cockrell says she’s not sure she can trust any promises the company makes from here on out.


Unlike a credit card, debit card transactions are considered cash transactions by the companies that issue your debit cards. When you pay with a credit card, you have certain dispute rights with the company who issued you your card to ensure that you receive the product or service you purchased. When you pay with a debit card, you lose the right to dispute the charge in almost every case. In other words, if you use your debit card, the issuing company will not fight on your behalf to get the product or service you paid for with the card.  It’s in the fine print of your debit card agreement, but most consumers are unaware of this very important difference.

So, while you may be trying to be more financial prudent by using your debit card rather than your credit card, you are inadvertantly giving up important rights to dispute any charges. 

KNOW YOUR RIGHTS!  Read your debit card agreement very carefully and be mindful of the types of purchases you pay for with our debit card. If you have specific questions, call the customer service number listed on the back of your debit card.


About missionmortgage

A full-service professional mortgage banker providing lending in Texas for over 25 years. Our main office is located at 901 S. Mopac Expwy, Barton Oaks V- Suite 120, Austin, TX 78746 with branches in Lakeway, Houston, and Sealy. Mission Mortgage has been ranked as a Top 10 Mortgage Company in Austin for the past 7 years (Austin Business Journal).
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