Debit cards are incredibly convenient- as long as you understand how to use them. Some people think they’re just another piece of plastic that adds nothing to their lives, but that’s probably because they don’t understand how advantageous they are. Sure, there are some drawbacks but that’s only because there are ‘rules’ when it comes to using them. And it’s normal for any sort of service to have guidelines!
If you really think about it, debit cards can be really helpful. Here are a few facts about our little plastic friends that you’ve probably never considered before.
1. There Are Some Security Issues
The only thing keeping your money out of someone else’s hands is a four-digit PIN. If your card gets stolen make sure to call your bank immediately as it’s possible the perpetrators may have gained access to your PIN as well, for example by watching you enter it while waiting in line at the grocery store. Most importantly, don’t write this number down anywhere near your actual debit card. If the two get lost together, you’ll be in a world of trouble.
2. You Can Use Debit as Credit
Yes, you can select to use your debit card as a credit card when making transactions. When you select credit, you’ll be going through the credit network. The difference is simple. Entering a pin means your money will flow instantly. Having to sign takes you to credit.
But be careful, you’ll still be authorizing a debit card withdrawal, so you won’t be covered if anything suspicious happens! Use this only as a last resort if you absolutely must.
3. Using an ATM Implies Some Fees
Using an ATM may be convenient when you need cash, but it isn’t free all the time. Your bank’s ATMs are probably free to use, so there’s no need to worry. But if you’re in a pinch and can’t make it to one, you should know most other machines will charge you, so keep that in mind. You’ll probably be expected to pay a flat fee or a percentage of your transaction.
4. Disputing Charges Can Be Difficult
Disputing purchases made with debit cards is incredibly difficult. That’s because the money leaves your account instantly and you have no guarantee of getting it back. If you can, opt for a credit card instead. Your transaction will be protected if you make any online purchases, so you’ll be able to save yourself a worry.
5. There May Be a Limit to the Number of Debit Transactions You Can Make
Things can get a little confusing when you’re making several transactions a day or a month, especially if you’re unaware if your bank has a limit. What makes it even more complicated is that different cards may have different rules, amounts, number of transactions and some banks even distinguish between online and in-person purchases.
Speak to them and make sure you have all the details before it’s too late. You don’t want to find out just as you’re prepared to pay for something important. You could also ask if any of these details could be changed, as some are set up in order to protect you in case your card gets stolen. But then again, if that’s the case, think hard if you want that measure of safety removed at all.
6. Checks from the Account Can Be Processed as Debit
If you’re used to checks taking a few days to process, you might be surprised whenever money will be taken out of your account immediately sometimes. There may be instances in which checks will be processed as a debit transaction, and as always, it’ll be an immediate payment. When using this method of payment through the mail, you should still expect a few days of lag time.
7. Your Funds Are Used Instantly
If you’re used to a credit card then you’re probably used to keeping track of a delay in between purchasing and your account balance changing. But Debit cards do away with all of that. And it’s no wonder since you’ll be using your own money. Payments will go through immediately. Keep that in mind in order to avoid overdrawing!
8. Pay Your Taxes with Debit
Many people aren’t even aware you can pay your taxes electronically by using a debit card. Of course, you have to keep transaction fees in mind and you absolutely have to make sure you’ve got the funds on your account. The last thing you want, come tax season, is for your transaction to bounce.
9. You Can Get Cash Back
Don’t have an ATM nearby and don’t want to worry about transaction fees? No problem. If you’re on your way to the store, ask about cashback at the register. You’ll pay for your items and add however much you need on top of that. The cashier will simply give you the extra money back without a hassle.
So, did any of these surprise you? If you don’t have a debit account yet, have any of these facts convinced you to open one or are you going to stick to credit? No matter what you decide, we hope this article has helped shed some light on the different ways you can handle your finances and transactions!