Smart tips for using your debit card

Tips for using debit cardIt's a debit card: You swipe it, punch some buttons and put it back in your wallet. How tough can it be?

Actually, experts say there are a handful of ways you can modify your debit card usage to make sure you're not wasting any of your hard-earned money on unnecessary fees or having your valuable dollars locked up by some company. details a number of steps you should take for good debit card management. WalletPop also got on the phone with Linda Sherry, director of national priorities for watchdog group Consumer Action, to get her expert opinion on all things debit-card related. If you don't want to read the whole article, here's the short version of what you need to know.

First of all, don't opt into overdraft protection, especially if you know deep in your heart (be honest!) that you can sometimes be a little careless when it comes to money management. It can only take a few errant swipes to rack up some big fees.

"What people really need to do is look at what their bank's sending them," says Sherry, since the rules about overdraft program enrollment change in August. At that point, you'll have to opt in. For most, Sherry says, this is a bad idea. Even though some banks are starting to cap the number of overdraft charges they'll zing you with over the course of a day or a week, it's still money coming out of your pocket. A better solution is to link the checking account connected to that debit card with a savings account or line of credit.

Next, keep track of your debit card use, whether you write down transactions in a check register or go online (ideally every day) to check your account information. According to Sherry, online banking is the best way to go. "That's my preferred way to keep close tabs on your account," she says. Make sure you have a good password (don't use "1111" or your birthday or your dog's name), and don't write it down anywhere -- this helps prevent the chance that someone might break into your account.

If you do use online banking, it's important to click through and not just look at the balance that's displayed right after you log in. Here's why: If you use your debit card as a credit card (where you sign instead of entering a PIN), it can sometimes take a few days before the merchant processes that transaction. So you think you've paid for the goods, but the money's still in your bank account. If you just look at the current balance, you might think there's more money available to you than there actually is.

Finally, stick to a credit card for big-ticket and travel-related purchases. Credit cards offer more protection if something goes wrong, and you won't have your money locked up if a hold is placed on your account to cover the cost of something like a hotel stay or a car rental. Using a debit card for travel can lead to trouble, as more people are unfortunately discovering.
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