If you use your debit card then it is important that you follow some basic but important rules in order to keep your bank account healthy and your bank manager happy and your financial future stable.
Keep a Record of Transactions
Keeping a note of any transactions you make with your debit card means that you will be able to tell at a glance how much you’ve spent and how much you have left to spend. It will also help you to avoid overdraft fees, bounced checks and ultimately a lot of stress. This is even more important if you have a joint account as it is easy to lose track of what one person has spent if there is no record or note of it.
Be Honest with Yourself
Don’t make excuses for yourself. If you have bad habits such as losing receipts or not balancing your checkbook and getting regular overdraft charges then make a conscious effort not to get your debit card out every time you make a purchase. Limit yourself to using it for the big monthly shop or fueling the car and use cash for smaller purchases.
Know the Difference between Credit and Debit
Credit means that the funds will not be taken out of your account immediately, while debit is an instant transaction. Using credit can leave funds in your account for a few days, and sometimes it is easy to forget that the money is already spent and cause you to incur overdraft charges if you “spend” it again.
Beware of Holds
Making a reservation for something sometimes means a hold being put on that amount in your account. It is sometimes possible that funds can be on hold for as long as 30 days, and if this is ultimately going to cause you problems then think about using a credit card for any deposits and paying the balance off with the debit card.
“Opting In” Isn’t Always the Best Option
Banks are no longer allowed to let customers go overdrawn with their debit cards unless they choose to “opt in,” but this is not always the best option. But statistically more customers would prefer it if their card was declined when they tried to pay for something rather than getting an overdraft fee. If there aren’t enough funds in your account but you are extended credit, then your debit card might well become an expensive way of paying for items. An alternative to the “opt in” scheme is to link your debit card to your savings account instead.
Check Your Account Daily
Get into the habit of checking your bank account on a daily basis. This will enable you to keep track of every transaction, and if there are any unexpected charges or fees you will be aware of them straight away and be able to act accordingly.
Use Credit not Debit for Larger Purchases
You are not eligible for as much consumer protection with a debit card as you are with a credit card, so buying larger items such as electronics or appliances can sometimes be the better option. If there are any subsequent claims on your account you will be more likely to be successful with a credit card purchase than you would be with a debit card purchase.
Take Care When Linking Accounts
While linking your debit card to a savings account can possibly save you on overdraft fees it opens the door to possible fraudulent activity. The more accounts that are linked, the more chances of something going wrong, so always try to limit any linked accounts to just one.
Choose a Good PIN
Avoid choosing a PIN number that is easily guessed at. Your birthday or last 4 digits of your SSN might be easy for you to remember, but they are also easy for someone else to guess, and that leaves you open to all sorts of possible problems.
Keep Your PIN a Secret
Always remember that your PIN should be known by you alone. If anybody, your bank included, asks you for your PIN, refuse and then report them. Treat your PIN as you would the keys to your home, safe and secure.