ROANOKE TIMES
Copyright (c) 1996, Roanoke Times
DATE: Monday, August 12, 1996 TAG: 9608130032
SECTION: MONEY PAGE: 6 EDITION: METRO
SOURCE: MAG POFF STAFF WRITER
WHEN you are buying in the marketplace, such as at a restaurant or store, the debit bank card operates like a standard credit card.
But when the sales slip reaches the bank, either at the time of sale through a terminal or a few days later, the item becomes a check.
This hybrid has been around for about two decades and, for all those years, called a debit card. Now it has been dusted off by banks and given new life as a check card.
The new name fits it better, said Don Schonder, vice president for credit corporate marketing at NationsBank.
A credit card accesses a line of credit. Every time you use the card, you are borrowing money. Unless you pay your charges in full each month, you will be charged interest on your loan.
A check card, on the other hand, is tied to your bank account. The merchant who accepts the card has no way of knowing whether it is a credit card or a check card, Schonder said, but the purchase will be deducted directly from your checking account as soon as the sales slip hits the bank.
If the merchant is on line with his card machine, the deduction will be made while you are still talking to the cashier.
The check card is being promoted for two reasons, said James Small, vice president for strategic marketing at Crestar Bank. It gives the merchant security and makes for a shorter transaction time.
The bank backs the card the way it does a credit card, so the merchant is safe in accepting it. Most merchants, he pointed out, are leery of accepting checks and usually require two means of identification - one is usually a credit card.
The identification process holds up the cashier's line, Small said.
The check card is instantaneous.
Check cards are accepted anywhere a business accepts Visa and MasterCard. That means the card is accepted without question by 12 million merchants worldwide.
Small said customers also like receiving a statement that shows the date and location of each transaction, compared with a checking account statement that lists only check numbers and amounts.
David Scanzoni, spokesman for First Union National Bank, said the card should appeal to people who write a lot of checks but who would like to avoid that hassle.
Other people who have run up credit card bills may switch to a check card, said John Nania, a vice president of Central Fidelity Bank. The check card gives them more control over their spending because they cannot shop beyond the balance in their checking accounts.
Many people don't like using a credit card because they don't like being in debt, even for just a month pending the arrival of the bill, he said.
"A lot of people are afraid of credit," Nania said.
Another advantage of the check card over a credit card is that it makes buyers think more carefully about what they're purchasing.
There is no such self-control with credit cards. People may plan to pay off their credit card balances monthly, but "most let something slide over and pay on the loan," he said. With a credit card, of course, the user gets to keep the money longer - until the bill is paid. With check cards, the user doesn't enjoy this float.
Schonder of NationsBank said some people have both credit and check cards because they have more flexibility in managing their money.
People with both cards may, for instance, pay for meals and routine purchases with a check card, keeping the credit card in reserve for larger purchases. The big items can then be paid for with revolving credit over time, while there is no interest added for the daily items.
Bank officials warn about one important thing that check card users cannot overlook. As with using an ATM, you have to remember to record every check card purchase in your check register.
There is still one safety net for people who use check cards, however, Scanzoni said. It's called overdraft protection.
LENGTH: Medium: 76 lines ILLUSTRATION: GRAPHIC: color.by CNB