“Why no Debit Cards?”
A debit card, or check card, is similar to a credit card but instead of accumulating charges throughout the month a share draft account, or checking account, is debited at the time of purchase. Debit cards have grown in popularity and consumer awareness is increasing. So why hasn’t the credit union offered this service? The reasons are many. The credit union is reluctant to offer a debit card because the expenses are high versus the benefit the membership would receive. You see, the most optimistic projections of the number of users of this service is low. Yet, for the credit union to purchase debit card software our vendor would charge us a fee based on our entire membership of 70,000. This charge is assessed whether we issue one debit card or 70,000. Another expense concern would be the addition of employees. The reason we provide superior dividend rates is largely due to our efficiency of operations (low expenses). We take the responsibility of adding personnel very seriously. We are very concerned about jeopardizing our success. Success that you have benefited from. And then there’s the increased chance of card misuse. Debit card purchases can be authorized simply with a signature as opposed to a secure PIN code. Due to this lack of security the number of fraud claims against the credit union would rise causing the credit union to bear more expense.
While many of the great features of debit cards are evident to consumers, merchants often have to bear the burden of higher costs associated with these transactions. Costs that ultimately get passed on to us (Don’t be fooled that if something is free it doesn’t cost anything). Some well known merchants have even challenged the requirement of accepting certain types of debit card transactions for this very reason and they have prevailed.
All the expenses may be worth it if there were no alternatives to debit cards, but there are excellent alternatives. First, your CSE ATM card works very much like a debit card. You can purchase gas, food, clothes and meals at thousands of merchant locations. Click here to link to a list of NYCE retailers that accept the CSE ATM card for payment. But, remember, the best way to find participating locations is to simply ask the clerk if you can use your ATM card instead of cash or a check - you may be surprised at how many retailers can accommodate your request!
Second, many of our members utilize their CSE Visa card much like they would use a debit card. This is actually more beneficial than using a debit card. You simply charge your purchases and elect to payoff the entire credit card balance on a monthly basis. We can even arrange for this to occur automatically if you like. And, unlike a debit card, you can choose to make payments from your checking or savings account. By paying-in-full there are no interest charges incurred on purchases and you gain the benefit of earning interest on your shares until the credit card charges are paid. A CSE Visa card has no annual card fee.
The credit union will continue to monitor new service offerings for our members. Due to low usage projections, high expenses and excellent alternatives, debit cards are currently not an option. Contact us today if you need more information about a CSE ATM card or our low fee, 28-day grace period, Visa Credit Card.