Seven things to know before getting a debit card


Debit cards are revolutionizing the way bank customers pay for their goods and services. With a debit card, you don’t have to carry around that much money. You also limit the need to write checks, show ID, and wait for approval. Plus, debit cards are more easily accepted than checks, especially when traveling away from home, according to a report from

According to the Michigan Association of Certified Public Accountants, there are two basic types of debit cards:

ATM Card – This card is used to get cash at ATMs and is accepted for payment using your personal identification number at some supermarkets, retailers and gas stations.

A card that bears the logo of one of the two major payment card companies. This card can be used to withdraw money from an ATM, as well as to make purchases anywhere such card logos are accepted.

The following points will help you get the most out of the convenient features of a debit card;

  • A debit card may look like a credit card, but it works like the electronic equivalent of a check. When you pay with a debit card, you authorize the bank to withdraw money directly from your bank account and pay it to the merchant. Like a credit card, you simply sign a receipt for your purchase. Unlike a credit card, there is no bill at the end of the month and no interest charge. The debit simply appears on your bank account.
  • Debit card debits are instant. Debit card purchases are immediately deducted from your account, meaning your spending is limited by your account balance. Be aware that if you have written checks that have not yet been cashed, your debit card may allow you to overdraw your account.
  • It is important to immediately notify your card issuer / bank if your debit card is lost or stolen. It is true that the liability of debit cards is higher by law, but in response to consumer concerns about liability for fraudulent use, some cards have instituted a zero liability policy. The zero liability policy applies to purchases made using your card or account information in a store, over the phone, or on the Internet. However, it does not apply to ATM transactions.
  • A debit card can help track spending. Since debit card purchases are listed on your monthly statement, using your debit card makes it easier for you to track your spending and saves you having to remember where you spent the money you spent. have withdrawn from the ATM. Additionally, if you bank online, many personal finance software downloads the debit transactions to your software, where you can assign them to the appropriate expense categories.
  • Debit cards do not offer the same purchase protection as credit cards. In most cases, if you have a problem with goods or services that you charged on a credit card and you have made a good faith attempt to resolve the issue with the seller, the law allows you to withhold payment. of the purchase as well as any financing or related costs. Regulations do not provide for such an allowance for debit card purchases (although some financial institutions do). Typically, you no longer have any money deducted from your account until the issue is resolved.
  • Some financial institutions charge for debit transactions. While you don’t earn interest or finance charges on debit card purchases, some institutions do charge a monthly or per transaction fee for debit cards. Shop around to find the best deal, especially if you plan to use your card often.
  • Debit cards can make balancing your checkbook a challenge. It’s easy to use your debit card to pay for groceries and put the receipt in the bag without ever deducting the amount of your purchase from your checkbook balance. To avoid the overdraft of your account, imagine a system for recording your debit card transactions.

When used correctly, debit cards are convenient, allowing you to effectively track your cash flow. Just make sure to protect your card, PIN, and receipts.

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