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Using Your Debit Card

What is a debit card?

More than two-thirds of American households have debit cards (also referred to as ATM cards or checking cards). But does everyone really know what a debit card is and how to use it? Are you aware of the pros and cons of having one?

Debit cards look and, in some ways, act like credit cards. They allow you to make purchases without carrying cash or the check book. They allow you to withdraw money from ATM machines. And if they have the Visa or MasterCard logo on them, they are accepted anywhere Visa and MasterCard credit cards are accepted. So what's the difference?

Using Your Card Responsibly

Debit cards are truly a convenience. But if you don't keep track of your purchases, your checking account balance and, most of all, the card itself, you could face some major problems. For example, overdraft fees occur when you use the debit card to make purchases that total more than what you have in your checking account. Also, purchases made with a debit card can't be disputed or refunded as easily as those made with credit cards. This is especially important to understand should you accidentally lose the debit card or have it stolen.

Because the card is tied directly to a checking account that is debited as the card is used, it is important that you don't lose the card

  • If the card is lost or stolen, call the bank immediately so that they can close the account and prevent unauthorized use of your money
  • If you do not do this immediately, someone else (should they find it or steal it) can use all the money you have in your checking account. And with federal regulations being different for debit cards than they are with credit cards, you may be the one that suffers the consequences.

Here are some tips for responsible use of debit cards:

  • Always protect your debit card and keep it in a safe place, just as you would cash, credit cards or checks.
  • Do not leave your debit card lying around the house or on your desk at work.
  • If your card is lost or stolen, or you suspect it is being used fraudulently, report it immediately to your bank.
  • Hold on to your receipts from your debit transactions. Don't throw them in public trash cans or even in your own trash without first shredding them.
  • Always know how much money you have in your account, and review bank statements carefully. Don't forget that your debit card may allow you to access money that you have set aside to cover a check that has not yet cleared your bank.
  • Never give your debit card number over the phone unless you initiated the call and are certain that the recipient is legitimate.
  • If you have a PIN number that you use with the debit card, memorize it. Do not keep your PIN number with your card. Do not choose a PIN number that a clever thief may be able to figure out (i.e. your birthday or phone number).
  • Never give your PIN number to anyone. Keep your PIN private.