Debit cards are the new standard when it comes to checking accounts. Most people leave their checkbooks at home or never even bother with them and instead pay most of their bills and make many of their purchases through the use of these cards. And while a debit card will usually not feature the high annual fees and interest rates that are associated with credit cards, they could very well have fees of their own. And understanding those fees is vital if you want to ensure that you don’t end up with unexpected charges on your bill at the end of the month. Take a few minutes to review your account policy for any fees before you agree to use the card.
One thing to check for is simply usage fees. Some banks will issue debit cards and allow their customers to use them free of charge, as often as they like. Others may have a flat monthly fee for anyone who has a card through their account, while still others may only charge fees if the card is used more than an allotted number of times. Knowing about these charges ahead of time is important, especially if you plan on utilizing your card with any regularity, so be sure to investigate their existence.
Another thing to consider is that while debit cards won’t charge interest, the risk of running over your available funds could cost you big. If you’re offered an ‘overdraft protection’ option, you may want to consider turning it down. If you have it in place, you’ll be allowed to withdraw or spend more than is actually in your account but will be charged very substantial fees for the ability to do so. While managing your finances can avoid this, simply not having the option available can help save you money in the event of an accidental oversight.
Likewise, check to see if there are insufficient funds charges in place. Some debit cards may not let you overdraw, but will still charge you a fee for attempting to do so. At the checkout counter you’ll get an ‘insufficient funds’ message and won’t be able to pay, but will then have to pay a fee to your bank for your mistake. These are just a few of the basic fees you may find on your bank statement, so be sure that you understand the hidden costs before you open up your account or you may be in for an unpleasant surprise.