Debit Card Mistakes and How to Avoid Them

Written by , April 9, 2011

Debit Card Mistakes and How to Avoid ThemDebit cards are handy little pieces of plastic. They give us easy access to the funds in our checking and savings accounts. They’re as simple to use as credit cards, but they don’t come with monthly payments or require us to pay interest. And if we need quick cash, we can get it from an ATM 24 hours a day, 7 days a week.

But just like credit cards, debit cards can cost us money if we do not use them properly. There are numerous mistakes that can be made that may result in unnecessary headaches and expenses.

Here is some advice about some of the most common debit card mistakes and how to avoid them.

  • Overusing the ATM. Even in today’s world, there are times when cash meets our needs better than plastic. Going to the ATM allows us to avoid lines at the bank and access our funds at any time. But it also comes with fees. If you use an ATM that isn’t operated by your bank, you may have to pay fees to both your bank and the one that owns the ATM. And no matter how small those fees may be, they really add up over time. That’s why you shouldn’t run to the ATM every time you need a few dollars. You can avoid fees by going to your own bank or getting cash back when you buy something.
  • Running your card as credit. There are two reasons why this is bad. The first is because merchants have to pay more for credit card transactions than debit card transactions. In most case this makes no difference in the price you pay, but some smaller merchants will charge you more for using a card that is run as credit. The other reason is that debit card transactions clear immediately, but if you run your card as credit, the transaction may not clear your account for up to 60 days. This can cause confusion if you don’t keep close tabs on the amount you’ve spent.
  • Not keeping track of your balance. All too often, debit card users lose track of their balances and overdraw their bank accounts. That exposes them to overdraft and/or bounced check fees. It’s best to keep a check register and write down every transaction in it as it’s made. At the very least, check your balance through your online banking website regularly.
  • Not keeping track of your partner’s debit card use. In the case of a joint bank account, all account holders usually have a debit card. If you don’t keep track of your husband, wife, or other fellow account holder’s transactions, you could find yourself in trouble quickly. This may be avoided with communication. Whoever keeps track of the finances should receive a report of expenditures each day, and large purchases should be discussed beforehand.
  • Buying big ticket items with your debit card. When it comes to large purchases that may need to be returned, it’s much better to put them on your credit card and pay the balance in full than to use your debit card. That’s because if you have trouble getting your money back from the merchant, you can file a claim with your credit card issuer and receive credit immediately. If you use your debit card, you won’t get your money back until you convince the retailer to give it back to you.
  • Many of us use our debit cards every day. By avoiding these mistakes, you can enjoy the benefits that your debit card has to offer without regretting it later.

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