Debit Card Smarts

August 29th, 2022

Save money and potential headaches with these debit card tips:

  • Only use in-network ATMs. All debit cards are also ATM cards and are used by many to access cash. One of the most common fees appears when you use an out-of-network ATM.

    What you can do: Understand the ATM fees charged by your bank. Only choose a bank that provides free ATM withdrawals for in-network locations. Look at the back of your debit card to see what ATM networks are in-network. Then use only those ATMs.

  • Fraud protection benefits are different. Most credit cards provide zero liability on any unauthorized charges. Debit cards also offer protection against fraudulent purchases, but there may be limitations depending on which financial institution issued your card. According to federal law, here are the maximum amount of fraudulent transactions you’ll be responsible for relying on when you notify your bank that your card is lost or stolen:

    What you can do: You can immediately notify your financial institution once you realize your debit card has been lost or stolen. Frequently review transactions online to identify any unknown charges. But also check with your bank to verify the liability coverage and the timing required to report a fraud on your debit card.

    • Immediately notification of unauthorized charges is made: Zero liability
    • Within two business days: Up to $50
    • After two business days but within 60 days: Up to $500
    • Fail to notify within 60 days: Unlimited
  • Have multiple ways to access your cash. If your debit card gets lost or stolen, have another way to pay bills until your new debit card is issued. This is especially true if you’re traveling.

    What you can do: Ask your bank about its options for issuing multiple debit cards for the same checking account. If you’re opening an account other than a free checking account, ask about potential fees, service charges, and balance limitations.

  • A debit card is not always the best payment method. Remember that a debit card provides financial access to your bank account. Your ability to pay other bills can be affected if it goes wrong. For example, a stolen debit card may require you to lock your checking account. What does that mean for your other outstanding payments, like your mortgage, vehicles, or utilities? Your financial life can be thrown into chaos.

    What you can do: Avoid using a debit card on websites targeting scammers. Avoid using it for air travel, given all the recently canceled flights, as you could quickly empty your checking account while trying to get refunds. Consider having a separate bank account as a backup if you need to shut down the account linked to your debit card.

While debit cards quickly overtake checks and cash as the most popular payment method, evolving your use of them is essential to maximize your benefit.