Earlier this year, a Consumers Union survey of seven of Texas' largest banks found it common practice to mail unsolicited debit cards to bank customers as a replacement for their ATM cards. Banks fail to fully disclose the pitfalls associated with the cards. The debit cards look like ATM cards. This causes widespread confusion whereby consumers often are unsure of what they really have in their wallets. The banks' big push for the cards is no accident.
Debit cards are big money makers for banks.
Purchases made with debit cards cost less than half the amount it costs to handle a payment via a traditional paper check. They earn the banks more in merchant fees than the more traditional and secure debit cards. In a nutshell, a debit card gives consumers convenience by potentially compromising security. Recently, Mastercard and Visa took steps to make debit cards more consumer friendly. But their new policies don't go far enough.