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Smart Debit Card Use

Use your debit card to help you budget

If you use your debit card for virtually all of your purchases, then you have an automatic record of your spending.  Use these records to populate your budget, assigning each transaction to your categories for household spending.

Keep track of your available funds

When using an ATM, check your total and available funds so that you know how much you have in your account.  Set up electronic alerts to be sent to your mobile phone to tell you when your account falls below a certain level so that you can reconsider that next purchase.

Protect your PIN

Memorize your PIN and never write it down and carry it around with you in your wallet.

Choose "credit" at the cash register

By choosing "credit" and signing at the cash register (as opposed to choosing "debit" and entering your PIN), you are taking advantage of the consumer protection provided by the Visa or MasterCard logo.  And, since the transaction is going through the credit card rather than the checking account network, it may take many more hours for the funds to exit your account.

Be careful at hotels, car rental, and gas stations

Be aware that hotels, car rental companies, and gas stations regularly put a "hold" on your account when you use them.  Sometimes they do not even tell you that they are doing this.  If you are using a debit card for this type of transaction, understand that having a hold placed on funds means that money you might need immediately to pay other bills or make other purchases will not be available. 

Avoid using debit cards online

When making an online purchase with a debit card, funds come immediately out of your account.  This may be well in advance of your receipt of item that you have purchased.  It is wiser to use a credit card for online purchases since then you have the consumer protection of credit card laws: 

  • cancel the transaction or
  • have the credit card company deny payment if the product you receive is wrong or damaged.

Contact the bank at the first sign of trouble

Monitor your account throughout the month and contact the bank immediately if you notice a transaction that you do not recognize.  The sooner you report it the sooner it can be remedied, potentially saving your hard-earned money.  If you report theft within the first 48 hours, will not lose any money if they had signed for their purchase and will not lose more than $50 if they had entered a PIN.

If you report the theft between 3 and 60 days of the transaction, your liability may only be limited to $500.  After 60 days, there is no limit to your liability for a fraudulent transaction on your debit card.