Debit cards (sometimes called check cards) can be a great way to manage your money. You might not be old enough to apply for a credit card, but you still want to buy stuff online. Or maybe you want an easy and convenient way to make day to day purchases
without risking a late payment or interest charges. Debit cards are great in these situations. But there are a few pitfalls that need to be avoided
1. Protect your PIN- Your Personal Identification Number is a 4 digit number that makes sure you’re the only one using your card. If someone else discovers this number and gains access to your card, you can kiss your money goodbye. Make this number hard to guess, but easy to remember. Choose a number that has a personal meaning for you or simply make up a random one and commit it to memory.
2. Keep your checkbook up to date- Just because you aren’t writing an actual check doesn’t mean you aren’t spending real money. Record every purchase or deposit you make. This will keep you from over drafting your account and paying a ridiculous fee.
3. Be aware of ATM fees- Using your debit card is a quick and easy way to get some cash. But be careful, if you go to an ATM that isn’t owned by your bank you’ll likely pay a 2 or 3 dollar fee. Keep this in mind when shopping for a bank. Look for one that has ATMs located all over the place.
4. Exercise caution at the pump- Who goes inside to pay for gas anymore? But be careful when you use a debit card at the pump. When you do, a hold is placed on your account. This is because when you swipe your card, the pump has no idea how much gas you’ll actually buy. With fill-ups easily going into the 50-100 dollar range, gas stations need to know that you have the money. To do this, they place oh, let’s say a 100 dollar hold on your account. But you only purchase $30.00 in gas. A day or two later the gas station will “release” the $70.00 back to you. But if in those two days you go on a huge shopping spree thinking you have an extra 70 dollars, you could easily overdraft your account.
6. Stay Protected- Typically, debit cards offer less protection if they’re ever stolen. With debit cards, you have 2 days to report your card stolen. If you do this, you’ll only be liable for up to $50.00. Wait more than 2 days though, and you’ll be on the hook for up to $500.00! These rules usually only apply to PIN based transactions. If a thief uses “your” signature to make a purchase, you should be entitled to Visa and Mastercard’s zero liability protection.
