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Do you know the top 5 Debit Card blunders?

October 14, 2016

Debit cards are a simple, convenient way to make purchases. They allow immediate access to your funds upon transaction, which is about as close to cash as you can get without actually carrying a wad of bills. Each time you choose to swipe that little piece of plastic, there are some ramifications you should be aware of for informed money management. Are you making any of the top five debit card blunders?

Frequently using the ATM

While a debit card functions similarly to cash, sometimes you need actual cash instead of a card to make a transaction. While running to the nearest ATM might be the quickest and easiest course of action, ATM fees from banks besides your own can quickly add up. Rather than going straight to the ATM when you need cash, opt for stopping by your bank or getting cash back next time you use your debit card at the store. Unlike the ATM, your bank won’t charge you to make a cash withdrawal, and most stores will allow you to get cash back at the register with no extra fees.

Using your Card as Credit

Merchants have to pay more for credit card transactions than debit card transactions. While in most cases this doesn’t affect the price you pay, some smaller merchants do charge you extra when you run your debit card as credit. Additionally, debit card transactions are immediately processed, whereas credit card transactions may take weeks to process. This can be confusing if you don’t watch your spending closely.

Failing to Keep Track of your Balance

If you don’t know how much money is in your bank account, it’s easy for your card to be denied or for you to overdraw and face overdraft fees from your bank. Also, if you have a joint bank account, you should monitor the spending of your partner. If you don’t keep records of transactions or receipts, it’s a good idea to regularly check your bank account balance. Online banking, text alerts, and mobile applications are great ways to keep an eye on your balance.

Making large purchases with your debit card

It’s wise to charge large transactions to your credit card rather than your debit. Because money is immediately withdrawn from your account with a debit transaction, you might have difficulty getting your money back if there is an issue with the purchase or if you need to make a return. You can file claims with your credit card issuer and get money back quickly in case of an issue.

Not guarding your PIN

If anyone gets steals your card and knows your PIN, they have access to all the money in your bank account. Be sure to keep your PIN secret, especially when making transactions at the register. Shield the keypad with your body so those around you can’t peek.

Using a debit card is often convenient and user-friendly, but it does have some drawbacks if you don’t handle it well. Next time you get ready to swipe your card, avoid these common mistakes so you can get the most out of your debit card.

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