Many consumers find debit cards more confusing than convenient, according to a recent study by BAIGlobal Inc.
Despite publicity campaigns run by debit card issuers and the bank card associations, some consumers are stymied by the products' various names, saying they cannot tell if a "debit card" is the same thing as a "check card" (it is) or whether those differ from an ATM card (often they do).
Worse still, many debit card users say the product impedes their ability to keep track of checking account balances. When more than one person has a card tied to the same account, these difficulties multiply.
"The expansion of debit card use-from cash access to direct merchandise purchase-has disrupted cardholders' usual methods of record keeping and control," said Claire Peerson Braverman, senior vice president of BAIGlobal, Tarrytown, N.Y.
"People literally don't know how much money they have."
Using focus groups to gauge consumer attitudes, BAIGlobal found many cardholders did not know the difference between credit and debit cards.
This could be a problem, Ms. Braverman said, when consumers think they are buying something on credit but are in fact using debit. If they have low balances, they could later end up bouncing a check.
Consumers in the focus groups described several tactics for tracking expenses, such as designating a household basket for receipts, using the back of an envelope as a register, or calling issuers' toll-free numbers every day.
Some consumers said the Visa and MasterCard logos on the front of the cards led them to believe they had received hybrid credit/debit cards.
"Visa and MasterCard are powerful brands in the marketplace and are nearly synonymous with credit cards," Ms. Braverman said. "Issuers have to be especially careful with the distinction."
When promoting debit cards in recent years, MasterCard International and Visa U.S.A. steered clear of the word "debit," fearing it had negative connotations. Visa advertised the Visa check card, and MasterCard advertised MasterMoney.
This year MasterCard has dropped that name and began describing its product as the "MasterCard debit card."
"A few years ago, the debit card was confusing," said a MasterCard spokeswoman. "Now (we) are able to call it a debit card, because people more than likely know what it means."
Robert H. Baker, senior vice president of deposit and cash products at Visa, also disputed BAIGlobal's conclusions, saying most consumers know the difference between credit and debit.
If consumers were truly confused by debit cards, "you wouldn't be seeing growth" in point of sale transactions, Mr. Baker said. "Consumers don't have problems with these cards, and they're voting every time they pull them out of their wallet."
Mr. Baker cited a recent Visa survey of more than 700 consumers over 18. Seventy-five percent knew that debit card transactions withdrew money from their checking accounts, and 85% had no concerns about using the cards at the point of sale.