Capital One has created a new kind of debit card, and the company is hoping it will replace traditional debit cards or even credit cards. This new debit card can be linked to any account at any bank and can be used for purchases or ATM withdrawals. There will be no fees, and Capital One will offer rewards similar to their credit card program.
Consumers who have a Capital One credit card, for example, will be able to pool their rewards from the two products, earning the same level of points, miles or cash back no matter which type of card they use.
Right now, the new debit card is in the process of being offered to those who hold credit cards with Capital One, but it will be later be available to the wider marketplace.
The main problem I have with debit cards is the lack of consumer protection. If my debit card is stolen, my bank account can be drained, and the banks may not credit my account until conducting an investigation. That’s a scary proposition. This debit card apparently offers a benefit similar to credit cards.
If the card is stolen and fraudulently used, consumers should contact Capital One, not their bank. Capital One will reimburse the fraudulent charges to the linked checking account within a day.
This is not enough protection for me. If my number is stolen, not my card, then I’m not going to know that any fraudulent charges have been processed until I see a statement or check my activity online. While I normally check my activity almost every day, not everyone does so, and I can’t be confident that I will always have the ability or time to do so. I think I’ll stick with credit cards (and paying off the balance each month) for now.
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To me, no matter how much protection they try to give you, when something is connected directly to your bank account, Bad Things can happen. It’s much much easier in my world to just keep using credit cards that I don’t keep a balance on. It gives my money 20-30 more days to sit in a bank and earn interest, and I never lose money to fraudulent charges.
I would use a product like this (a debit card with credit card features/rewards) since I use debit all the time. But I certainly wouldn’t do it with a company with a reputation that Capital One has. If my bank offered it I would consider it, depending on the specific terms.
A debit card connected to your household account is sheer stupidity. I have two debit cards, connected to dedicated accounts that exist to support the cards. If anything goes wrong, my important payments will not bounce, because there only an ATM card on the main account.
I guess most of you are not aware of the “zero liability” that comes with debit cards that are branded with the MasterCard or VISA logo. This is the same protection that is offered with credit cards so can you see there is not any additional risk involved using a debit card vs a credit card? If someone steals your cc number, they can charge up to your limit. If someone uses your debit card, they can charge up to the balance or daily limit. HOWEVER, both have zero liability so the funds would be reimbursed or credited within 3 days. That is required. Think about it: if you have ‘zero liability’ why NOT have a debit card?
Protection or not… any card linked directly to a checking account can cause trouble, even in the day or two it takes for the company to reimburse you for a fraudulent charge. If my rent payment, for example, is being directly debited on the same day my debit card is used fraudulently, not only am I out for a day, two, or three for the fraudulent charges, but also the overdraft fees. That’s an unnecessary risk.
I don’t know about this card, but I have had a Capital One Debit Card for about 4 months now. It is NOT linked to ANY bank account. I load money on it each month (there is a $5.95 monthly service fee) and use it. If someone else were to obtain the card info and use it, they would only be able to use the amount of money I loaded on the card, which is usually $500 or less. They would have no access to my bank account. So far, so good with the debit card.
Tara, the problem with prepaid debit cards like yours is that if someone does steal the card/number, you LOSE the money loaded on the card and there is NOTHING you can do to get it back. A linked debit card like most banks offer carries the same protections as a Visa/MC credit card. Banks like to make you think you only have 30 days or less to dispute unauthorized charges and that simply isn’t true. As a chargeback rep for a major credit card processing company, I can assure you that timeframe is much longer… 120 days for Visa/MC and a whopping 365 days (for fraudulent charges) for Discover. I’m actually considering getting one of these Capital One debit cards for my current checking account and using that card instead of my Visa check card that comes with the account. My Visa card doesn’t offer rewards and I use it for probably 95% of my purchases since I don’t like taking the risk of losing cash or having it stolen. My husband has been mugged before and lost $200… gone… no way of recovering it. If he’d had the money on his Visa check card instead of cash, we wouldn’t have been out a dime. Neither one of us carries more than $30-40 in cash now.
The only thing that bothers me is HOW is Capital One making any money off this? What’s in it for them unless it’s just advertising. There must be some vital piece of info that isn’t in the adverts.