Debit cards provide a convenient way to make purchases when you don’t have cash on hand. These cards are linked to a checking account, so you are only spending money you already have. Unlike using a credit card, you aren’t borrowing the issuer’s money and you won’t rack up finance charges. Depending on your bank’s policies, however, you may face a variety of fees when you use your debit card, which may add up to a significant sum if you use it frequently. If you want to avoid debit card fees, you may do well to read your bank’s debit card disclosure, opt for a debit card that does not carry fees, avoid overdrafts, and limit yourself to using automated teller machines (ATMs) that belong to your bank.
One of the best ways to avoid racking up debit card fees involves reading your bank's debit card disclosure carefully. Usually, cardholders receive this statement when they initially obtain a debit card, and they may receive updates on this disclosure from time to time. It is important to read this statement carefully before you decide how you will use your debit card. If you cannot find this statement, you may call your bank and request a copy or even read it online. It should include details about the types of transactions that will incur fees as well as the amount you will be charged; your bank may, for example, charge a fee for transactions in which you use your pin.
You may decide that a good way to avoid debit card fees is banking with a financial institution that doesn’t charge fees for most debit card uses. There are many banks that do not charge fees for online and point-of-sale purchases. In some cases, the debit card fees that are charged may depend on the checking account you choose. For example, some banks have accounts that encourage paperless transactions and offer no-fee debit card use. If your bank doesn’t offer this option and you use your debit card quite a bit, it may be worth it to switch banks in order to save on fees.
Another important way to save on debit card fees is to avoid overdrafts. This means making sure you always have enough money to cover your purchases, checks, and other withdrawal transactions in your account. If you accidentally overdraw your account, some banks may allow you to make a debit card transaction despite the fact that it exceeds your balance, but charge a hefty overdraft fee. In fact, you may have enough money in your account at the time you make the transaction, but have a check post before the end of the same business day. In such a case, you may incur overdraft fees as well, though they may be associated with the check overdraft.
In most cases, you can use ATMs owned by your bank without incurring additional fees, though this may depend on your bank’s policies. If you use an ATM owned by another bank, however, you may be charged a fee for withdrawing money. These fees may be small, but can add up over a period of time. Limiting your ATM use to ATMs your bank owns can help you save money on fees.