5.2 Debit, Prepaid Cards, and Electronic Transfers

Today, the majority of Americans make payments using:

• Checks

• Prepaid Cards

• Automated Clearing House Payments

• Debit Cards

One method to verify a debit-card transaction is though the use of a:

• Personal Interest Number

• Personal Identification Number

• Public Interest Number

• Public Identification Number

A payment made directly from a cardholder's checking account using the cardholder's signature to verify the transaction is called a(n):

• Check Transaction

• Debit Card with Signature

• Check-to-Electronic Conversion

• Automated Clearing Housing Transaction

When Ann was traveling outside of the United States, she found the perfect souvenir. Unfortunately, when she went to make the purchase with her debit card, the transaction was denied. This happened because Ann had only $200 in her account, and the souvenir cost $300. Ann was disappointed and regretted having to pass on her purchase. What could Ann have done before her trip to ensure that she could spend more than what was in her account?

• Added overdraft protection transfers from her savings account to her checking account

• Traded her debit card for a prepaid card

• Asked her bank to allow a direct debit for international purchases

• Added fraud protection to her account

At a minimum, to obtain a prepaid card you need:

• a bank account

• a checking account

• cash

• a debit card(s)

Place the following Automated Clearing House or hybrid process steps in order:

I. Sign check

II. Record check information with device

III. Deduct payment after bank receives information

IV. Merchant system sends check data to ACH operator

• I, II, III, IV

• I, II, IV, III

• II, I, III, IV

• III, II, IV, I

Rahim purchased a car 6 months ago. When he applied for an auto loan, the lender required that Rahim allow the bank to automatically debit his checking account on the 15th day of each month until the car is paid for in full. This transfer is an example of what type of electronic payment method?

• Credit Transfer

• Automated Clearing Hour Transfer

• Debit Transfer

• Check Transfer

Tommy lost his prepaid "City Buck" card 3 weeks ago. Someone found the card and made $350 worth of purchases, which was enough to deplete the card's value. How much fraud protection can Tommy count on?

• $0

• $50

• $500

• $350

Marc is just starting out in the world of personal finance. Help him determine the most appropriate way to avoid being a victim of debit-card fraud. Which of the following should Marc do on a regular basis to protect himself?

• Keep a mental checklist of recent purchases rather than write down the details so that a potential thief cannot obtain detailed shopping information

• Carry all his debit and prepaid cards in his wallet to ensure that if his apartment gets robbed the thieves will not get the cards

• Share his PIN with his girlfriend, best friend, or work colleague as a safety precaution

• Cut up or shred his old card(s)

Nedra uses her debit card on a daily basis. The last time she used it was the evening before at a restaurant. This morning, she noticed that the card is missing. How long does she have to report the card as lost to have 100% protection against fraudulent use?

• She has 2 days from the date of the last authorized use

• She has 2 day from the date she determined the card was lost

• She has 30 days from the date of the last authorized use

• She must report the card immediately before any unauthorized withdrawals are made