8 Best Tips On Using Your Debit Card

Many consumers prefer prepaid credit cards than traditional credit cards

. The reason? There is less risk of getting caught up in debt problems. However, this does not mean that you can let your guards down. There are also instances where a debit card holder gets into trouble if wrongly used. Below are eight practical suggestions on how to use debit cards wisely.

1. Put your personal spending in check. Unlike a credit card, a debit card does not give the privilege to make advanced purchases. However, if you deposit a large amount of money in your account, there is still the tendency to spend your cash on unplanned purchases. Ultimately, the cardholder needs to exercise control over his/her own spending.

2. Monitor your purchases. The best way to keep track of your spending is to list down every transaction you make using your debit card. Keep a record of all your transactions so for your personal reference.

3. Avoid overdraft fees. Generally, debit cardholders are not allowed to exceed their borrowing limit. Nevertheless, there may be instances when your payment will be accepted even though the available fund in your account is insufficient. Watch out! You may be charged with an extra fee for these transactions. Overdraft fees can range from $30 or more, depending on your debit card. Thus, to make sure that you will not encounter such problem, check your debit account first before using it for payment.

4. Look out for "holds". Hotels and car rental companies usually impose a "hold" on debit cardholders when placing a reservation. Be sure that you understand the merchant's policy on "holds" such as how long your funds will be frozen and the exact amount that will be placed on hold. Furthermore, make sure that you have enough cash in your debit account to pay for the transaction, aside from the cost of "hold".

5. Choose a strong PIN code. A strong PIN code can protect you from unauthorized transactions. Be sure to create a password that includes both numbers and letters. Moreover, the use of your personal information as PIN code should be avoided since these can easily be guessed by identity thieves.

6. Check your account often. Make it a habit to check your debit account online regularly especially after you used your card for payment. See to it that you were not charged for additional fees that you are not aware of. The Federal Law protects debit cardholders from unauthorized transactions but there is a limit ($50). In addition, you need to inform your bank about the unauthorized charges within 2 days after the transaction was made.

7. Never link your card to your savings accounts. Linking your debit account to your savings account is not a wise move since it will only compromise your bank details.

8. Do not use your debit card for large purchases. If you want to make a large purchase online, it's best not to charge it to your debit card. Always remember that debit cards offer only limited protection for buyers. By using a credit card on large purchases, you can enjoy Fraud Liability Protection and the option to dispute charges should you need to.

Copyright (c) 2010 Tara Tiemann

by: Tara Tiemann

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