Debit Card Tingz

Rep: Thank you for calling ABC bank, Stephanie speaking, how may I help you?

Customer: Hey, I tried to use my card this morning at the Walmart right down the street from my house that I always go to and for some reason it got declined. I checked my account and there is more than enough money it. The only thing I did notice is that there is a difference between by balance and my available balance.

Rep: Ok sir, I’d be more than happy to assist you. I’m just taking a moment to look over your account…. Did you recently purchase anything from Taco Bell?

Customer: I got lunch there yesterday afternoon, but why would my card decline just for buying myself lunch?!?!

Rep: Actually sir, the card is declining because Taco Bell is still pending to clear your account. The difference that you notice between the balance and the available balance is the$7.89 purchase you did yesterday. If you subtract the 2 amounts, you would actually get a total that is equal to the $7.89.

Customer: Oh really? Why wouldn’t my money just come out right away after swiping my card?

Rep: Well sir, it all depends on the time it takes for the merchant to settle their batch of purchases. We usually put the funds on hold for 2-3 days before the transaction clears your actual balance. The only way to be certain that the funds will clear your account right away is to use your card as Debit, in which case you will have to enter your own PIN. Unfortunately not all places allow you to do so. I’ve even seen a transaction drop off of an account and come back to clear after a month because the merchant took a long time to settle their batch.

Customer: Okay, so what you’re saying is that I should always look at my “Available Balance” in my app and not just my “Balance”.

Rep: That’s exactly what I’m saying. I also think that you should double check and balance your account using your own personal register so that there are no hiccups.

Customer: Wow, I have truly learned so much from this call. You’ve been a great help!

Rep: Anytime! Thank you for calling ABC Bank, have a great afternoon!

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Have you ever had any of the same questions that the customer had above? If so, I’m pretty sure you’re like most of the other people in this country that have never received a proper lesson on how to use a debit card. Debit and credit cards are very similar. The biggest difference is that debit cards do not bring you into debt (unless you bring yourself negative and cause an overdraft fee). When using a debit card, you are only able to use the money in your checking account or that you have loaded onto a prepaid debit card. Some institutions allow you to link your debit card to a Line of Credit. In this case, pulling money from the Line of Credit can then get you into some debt. You can even link your checking account to your savings so that if you swipe your card and the funds aren’t in the checking, it’ll pull from the savings. Always check with your institution to see if there is a fee for overdraft protection.

Where Can I Use my Debit Card?

You can use your debit card in any place that you can use a credit card. The most common servicers for debit cards are VISA and MasterCard, so if the merchant takes these, you’re good to go. Always be cautious of where you swipe your card. Keep in mind that your debit card is linked to your checking account, so if scammers get a hold of your card information, they have direct access to your funds in the account. You are somewhat protected by fraud but it is much easier to just protect yourself in the first place. Some thieves put skimmers on card machines to steal your information and completely drain your account. Be very careful using your debit card to make online purchases.

Can I use my debit card at the ATM?

A lot of people only use their debit cards to withdraw money from the ATM. For a long time, financial institutions only issued ATM cards, which you could use to take money from the ATM Machine and that’s it. Now you can use your debit card for purchases, ATM Withdrawals, ATM deposits, and even to cash a check at the ATM in some cases. Keep in mind that some ATMs do charge a surcharge fee for using the machine. Check with your institution to see if they charge you a fee to use ATMs as well.

Can I get a Debit Card if I Have Bad Credit?

The good thing about a debit card is that you can use it like a credit card so you don't always need to use cash. A debit card uses the money in your bank account so you can probably still qualify if your credit has a few hiccups. Unfortunately, debit cards cannot help you to build credit. If for any reason you do not qualify for a checking account/debit card, keep in mind that you can always try for a prepaid debit card.

What is a prepaid debit card?

A debit card is a convenient way to avoid using cash or writing a check when making a purchase or paying a bill with your checking account. Prepaid cards allow you to do the same thing without having a checking account. Usually these cards don't require a credit check and they help you avoid getting into debt as you can only use the funds that you loaded on to the card. Some employers even allow you to get direct deposit from your job directly to the card.

You mean to tell me I can get Rewards by using my Debit Card?!

Some FI's (Financial Institutions) offer a special rewards program for your debit card. You can receive discounts and/or accumulate points which can go towards travel, gifts, etc. I've even purchased an iPad with my debit card points. If this is an important perk for you, try looking for an FI that offers this feature.

That's my spiel on debit cards everyone, I hope it was insightful! If you have any questions, remember to visit the forum page or shoot me an email at shanieceaxtmann@gmail.com. Join me next time for a conversation about Savings Accounts.