The Battle Between EFTPOS and Debit/Credit Cards!

Several years ago, the Visa debit card was little more than a novelty. Credit was freely available, and if people wanted to buy off the internet, they would just get a credit card or use Paypal. In the last few years, though, with some crucial changes to the debit-credit card system and a push by banks to get customers onto them (because they represent increased profits for the banks), they are more common than ever. So whose side should you pick in the battle between EFTPOS and debit/credit cards?

EFTPOS and Debit-credit cards go to war!

What are debit-credit cards?

These cards are issued by Mastercard or Visa, and have all the functionality of a credit card, apart from one crucial difference … you have to put the money in before you can take it out. So, you can shop overseas, over the phone and online, but you cannot get into debt with these cards.

Why are they now more popular?

One reason why more consumers are opting for them now are some major changes from ten years ago – they now offer chargeback protection, and have a wide variety of different marketing incentives to get people on them. Another is the fact that people with a marginal credit history or low income are more likely to be rejected for a credit card since the financial crisis.

Another major reason is that banks are able to charge higher fees to retailers for customers using these cards, whereas the Reserve Bank sets a limit on fees that can be charged on ordinary credit cards.

So, should I use EFTPOS or a debit-credit card?

That all depends! They both keep you out of debt by ensuring you can only spend your own money. However …

• EFTPOS cards can’t be used to pay for goods on the internet or overseas
• EFTPOS cards don’t offer chargeback protection – if someone skims your card details and obtains your PIN, your money will be difficult to get back
• Debit-credit cards sometimes have surcharges put on their use by retailers. This might not be clearly communicated to you at the point of purchase.
• Debit cards are potentially more liable to fraud.

It comes down to using each card for its intended purpose. Have both cards – use your EFTPOS card at standard retailers, and use your debit-credit card for overseas and online shopping to get the best of both worlds.