Released: January 14, 2019

Help Desk FAQ

What do I need to know about using a debit card?

There are a number of debit card cautions and limitations you should be aware of:

• First, electronic transactions are governed by a different federal law than that which governs credit card charges. Regulation E, which implements the Electronic Fund Transfer Act, does not fully protect debit card users from fraudulent charges unless the cardholder reports a lost or stolen card within two business days.
• There is no grace period on debit card purchases the way there is on credit card purchases; the money is immediately deducted from your checking account. Also, when you use a debit card you lose the one or two days of "float" time that a check usually takes to clear.
• While debit cards look similar to credit cards, depending on the policy of the rental car company, you may not be able to use one to reserve a vehicle. When you make the reservation, you'll most likely need a credit card, but upon returning the car, you can pay your bill with a debit card.
• When you use your debit card to withdraw cash at an ATM that is not owned by your bank, you may be charged two fees, one by your bank and one by the owner of the ATM. Check the information at the ATM and with your own bank to determine whether the fees are applicable. Together, the fees could total as much as $4. On a $20 withdrawal, that's the equivalent of a 20 percent service charge.
• Some financial institutions charge transaction fees to customers who use their debit cards with a PIN to pay and to get cash back at supermarkets and other retail locations. Ask your bank about such fees before accepting and using its debit card. If you prefer to use the PIN option, shop around as most banks either waive fees with a minimum balance or do not charge any fee for PIN use at all.
• Many debit cards have daily withdrawal limits of up to $1,000. Purchase limits may be higher. Spending limits are meant to protect you in case your card is stolen, but if your withdrawal limits are too high, it can expose you to big losses. (If you have a joint account with two cards, the limits apply to the entire account, not to each card.) If you don't know your daily cash and purchase limits, call your bank to ask what they are. If the limits are higher than you like, ask the bank to lower them.