7 debit card mistakes to avoid

A debit card is among the most preferred payment modes. It is more convenient to carry than cash and easier to use. Besides, debit cards do not add to the mounting credit card bills one has to sift through each month. It helps take money from the bank account and pay for the purchase without adding to the loan amount. However, to manage money wisely, there are certain mistakes to avoid when using debit cards.

Repetitive ATM usage
There are times when using cash is necessary. People are forced to go to the ATM in such cases. Sure, rushing to the ATM is a quick and easy fix, but people should not forget the charges being levied with every withdrawal. When using an ATM, the person’s bank as well as the ATM’s bank charges a fee, which can quickly add up if someone uses this facility frequently. A solution is to go to the bank instead of the ATM during such times. Withdrawing from the bank means no extra fees will be deducted from one’s account.

Forgetting to check the balance
When purchasing with a debit card, chances are the transaction will not reflect on the app or account activity immediately. This means the account holder needs to wait a few days before being able to verify their actual account balance. In the period of these four to five days, one stands a chance of their new payments bouncing if their previous purchase has left them with insufficient balance. Since it takes time to display the actual amount left, people can be lured into a false sense of security. Not only can this be jarring, but it can also cost the person in the form of fines. So, individuals should get into the habit of writing down their transactions and tallying the results to be sure of their current balance. This can also come in handy for planning future purchases or setting a budget.

Not considering the hidden fees
Some debit cards have an annual fee. However, this is not the norm, so people might miss this detail. Those who are applying for a debit card need to be aware of the charges and hidden fees that come with it. One way of doing this is paying special attention to the small print when reading the brochures given by the banks. Individuals should choose the right card after extensively researching its pros and cons. Doing so will ensure that one is not using their money for paying fees and usage charges but for purchasing what they need.

Having too many cards
Each card has its own set of benefits. Some might have a smaller fee, while others might be able to earn more reward points. Some cards may also come with higher interest rates. That said, it can be so challenging to keep track of everything and decode which card to use when. Not to mention, users will have to handle that many bank accounts to maintain the cards. One will also have to pay the fees associated with each card. When all the fees are added, chances are users might be spending equal to, if not more, than the interest rate of all the cards put together. Therefore, one should limit the number of cards they use.

Using them without planning
Debit cards are one of the safest ways of spending money for people who cannot help themselves when on a shopping trip. The gradual decrease in the account balance acts as a red flag and can keep a person from going on an overspending spree. However, using a debit card also means sharing one’s account details with potential scammers. This should be reason enough to use debit cards strategically. Individuals should create a well-thought-out combination of debit and credit cards for payments. The use of credit cards can add another safety layer and even be beneficial in scenarios of dispute with the merchant. Chances are that users can also save more when using credit cards, as some come with additional benefits.

Not safeguarding the pin
Although obvious, we must emphasize that people should avoid writing down their credit and debit card pins. Those who have multiple debit cards with them may have a difficult time trying to remember the pin for each one. But that is not a good reason to carry out the risky task of writing them down somewhere. Even riskier is the prospect of having this note on the phone, in the wallet, or some other place that is easily accessible to others. The purpose of the pin is to keep the account safe and protected. By writing it down, people negate its purpose and make themselves vulnerable to financial fraud.

Not cross-checking pre-approved payments
Allowing auto-pay is one of the biggest mistakes debit card users can make. Yes, it is convenient, but the problem is that autopay transactions make it harder to track account balances. Imagine being out shopping, and the debit card payment fails because there is not enough balance in the account. This can happen when people have automated their electricity bill, utilities, phone, and other payments. Such failed transactions come as a shock to people who have already added items to their cart after a lot of effort.