• Stolen cards can be a cause of identity theft.credit cards image by Aleksandr Lobanov from Fotolia.com
  
  Debit cards can be a convenient tool for managing personal finance. They give cardholders the ability to make payments direct from a checking account and remove the need to carry cash or spend time writing paper checks. However, debit cards also carry certain risks of which all users should be aware.
  
  

Fraud

• Fraud is among the biggest risks for consumers using a debit card. Debit cards control access to the entire balance of the accounts they're linked to. This means that anyone who steals a debit card and learns the PIN (personal identification number) associated with the account can make purchases until the bank account is empty. Thieves can commit debit card fraud even without stealing the physical card. If they learn the card number and PIN they may be able to make purchases online. Most debit cards also double as ATM cards. This opens the door to unauthorized cash withdrawals anytime a card gets into the wrong hands.
  
  

Liability

• Debit card liability laws are not the same as those for credit cards. This creates a risk for debit card users who make bad purchases. For example, if merchandise a cardholder orders online or by phone never arrives, the debit card issuer may not offer a refund of the purchase price.
  
  

Identity Theft

• One of the most dangerous risks of debit cards is the possibility of identity theft. Debit cards are linked not only to the cardholder's bank account, but also a wealth of personal information that may include address, phone number, social security number and driver's license number. Thieves who access a debit card database or access a cardholder's account online may be able to use this information to make purchases, get a fraudulent line of credit or commit other crimes using the cardholder's name. Even when cardholders take steps to use a secure PIN and keep online accounts protected with passwords or firewalls, financial institutions must also safeguard all personal information provided by cardholders.
  
  

Overdrafts

• Debit cards make it easier for account holders to accidentally overdraw an account, charging purchases when there are insufficient funds. Some banks may enact a fee for overdrafts, making this more than a simple inconvenience. Debit card overdrafting often results from blocks, which merchants place on a card to reserve a certain amount of the account balance. If the cardholder actually spend less than the amount of the hold, the hold may remain on the account, resulting in an available ba;ance that is below the actual account balance.