Consumers might think their banks are in business to help them, but really more and more banks are getting in on the credit business to their complete advantage.

Debit Cards

Consumers do not typically carry check books anymore, but instead have replaced the bulky little bookkeeping companion with a slim piece of plastic now widely known as the debit card. The debit card looks suspiciously like a credit card, but is not. Do banks want you to think they are credit cards? Why do they look like one when they are not? The answer might not be so easy, but the fact is that debit cards can often be used both ways, as either a debit from your checking account or as a credit card. When you opt to use your debit card as a credit card, though, many banks slap your account with a little fee of a couple of dollars. Each little fee adds up, though, while many consumers are unaware of the practice at all.

Or, depending upon the bank, the practice could be reversed. Consumers with some banks are charged a fee for using their debit card as a debit card as opposed to choosing to use it as a credit card. Can this debit card, credit card situation get any more confusing? Regardless of how your bank directs your debit card use, you can bet your bottom dollar they are making money.

Most financial experts suggest, too, that many consumers are not clear on the fact that their debit card purchases often do not have the same protection as do purchases made with credit cards. While the debit card looks and smells like a credit card, it really is a cash purchase and those purchases are often difficult to dispute should the situation arise.

Overdraft Protection

Your bank probably offers some type of checking account overdraft protection whether you know it or not. The propensity of consumers to use their debit cards for many of their purchases leads into unwittingly dipping into a line of credit that kicks in without warning. Often these lines of credit, marketed as overdraft protection, offer high credit limits and exorbitant interest rates. By the time many consumers have discovered their mistake they already owe their bank an often significant amount of money, compounded by interest.