Know the Rules of Debit Card Use

I recently ran across a question from someone online that made me shake my head. The person wanted to know if using a debit card with insufficient funds is just as bad as writing a bad check. It’s hard to believe that someone would actually ask that question – of course it’s at least as bad to use a debit card when you know the funds aren’t available. At the very least, it’s important the you know the rules of debit card use and where the pitfalls lie.

For starters, a debit card is very clearly not the same as a credit card. Unless you have a special account set up that reverts to a line of credit in the event that you don’t have enough funds in your account, at a minimum, you’re going to be hit with some huge fees if you try to “charge” something to your debit card without having sufficient funds in your account.

It is also worth mentioning that you can easily overdraw your debit card account even if you’re not purposely making purchases that you know will draw you down beyond your budget. The reality is that certain purchases will temporarily charge more to your account than what you actually spend. For example, if you use your debit card at gas stations and use the “pay at the pump” function, the gas station will debit your account for more than it would generally take to fill a tank. In this way, the gas station can be certain it will receive enough money to cover the amount of the purchase. If you’ve made other charges on your card, this can make it appear as if you have overextended your account, even if you really haven’t. This is a fairly common occurrence with debit cards.
As a result of trying to draw down on an underfunded account, you’ll likely be charged some pretty hefty additional fees, which might cause even other purchases with the card to ultimately be denied by your bank.

Related Posts:

• Leave Your Debit Card at Home While Traveling Abroad - When it comes to traveling, debit cards really should NOT be your first payment option choice.  There are many reasons that you might want...
• 8 Little Debit Card Secrets - A debit card is a fusion of cash, check and credit card. Sounds very powerful but debit card users might just consider...
• CAT Cards — Debit Cards for Disaster Victims - After the devastation brought on by Hurricane Katrina, disaster relief debit cards have become better known to people around the country. These...
• Fee Free Debit Cards Offer Payment Alternative For Students - Some colleges and universities are offering fee-free cards that are pre-paid, similar to a debit card, to their students.  These cards are...

Tagged as: Security & Technology