If the transaction cannot be cancelled, you may be able to work out other arrangements with the store. Because funds are deducted from your account very quickly, don't expect to have the option to stop payment or obtain a refund. Because a debit card transaction is processed so fast, is it possible to order a "stop payment" or obtain a refund if I later discover a problem with the merchandise? Until the first ($50) transaction is cancelled by the bank, usually within 48 hours, you wouldn't have access to that amount in your account.
Typically, the gas station will create two transactions - the first to get approval from your bank for an estimated purchase amount (let's say $50) when you swipe your card before pumping gas, the second for the actual charges when you're done. Another example is when you use your debit card at the gas pump. One common situation involves a hotel putting a hold on a certain amount when you use a debit card (or credit card) to reserve a room. Yes, in certain circumstances, merchants can take these steps as protection against fraud, errors or other losses. If I use a debit card to make a purchase can the merchant put a temporary "block" or "hold" on other funds in my account? Depending on the terms of your account or the rules of the card network, the bank might approve the $200 purchase as a convenience, but it also might assess an overdraft fee for that transaction and subsequent ones until you make a sufficient deposit. Or, suppose you don't realize you have only $100 in your bank account and you want to use your debit card to buy a $200 item. In addition, even though a transaction was approved, you may overdraw your account because the bank won't know what other withdrawals you have made that day until it settles all transactions later that day. That means there would be little time to make a deposit to cover a purchase, if necessary. Often, a debit card purchase is posted within 24 hours instead of days, as may be the case with a paper check. How can I overdraw my account if my bank or bank network must approve a debit card transaction?įirst, because the payments are electronic, they are deducted from accounts more quickly than when using a paper check. Start by reading the disclosures that explain the account terms and fees to understand the potential benefits as well as the costs. Before opening a new account or changing banks just to get a different perk, study the fine print. How can I know which one is a good deal?Īs with similar financial products, rewards-linked debit cards are designed to encourage people to use a certain bank and its services. Some debit cards come with "rewards" or other incentives for using them. Be sure to read the disclosures to avoid an unexpected fee.
As with other bank products, your financial institution must provide disclosures explaining the possible fees associated with a debit card. Or, there could be a charge if you use your debit card as an ATM card at a machine that is not operated by your financial institution. You may trigger a fee if you overdraw your account using your debit card, just as you would if you "bounced" a check. Examples: Some banks charge a fee if you enter a PIN (Personal Identification Number) to conduct a transaction instead of signing your name. There may be fees for using your debit card. What kinds of costs are associated with debit cards? You can even use your debit card to get cash when you make purchases at a store. It's a good way to pay for purchases without having to pay interest, as you would if using a credit card with an outstanding balance. Using a debit card is also easier and faster than writing a check. Why do people use debit cards?įor many people, it is more convenient to carry a small, plastic card instead of a bulky checkbook or a large amount of cash. Most debit cards also can be used to withdraw cash at ATMs (automated teller machines). If you use a debit card at a retail store, you or the cashier can run your card through a scanner that enables your financial institution to verify electronically that the funds are available and approve the transaction. Why? Because the payment is deducted directly from a checking or savings account. Answers to frequently asked questions about debit cards.Ī debit card looks like a credit card but works like an electronic check.
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