It is true; the best part about a debit card is that it cannot spend over what is in your account. But, if you also spend within a limit with your credit card, this is not really a big concern. Having said that though there are a few things that you should know about your debit card:
'Debit' Dealings
A few years back, almost all banks issued separate ATM cards and debit cards. However, today most of them have combined the feature into one card, which is your debit card.
So the debit card is a simple instrument that helps you shop, make payments and even withdrawals from the ATM.
However, unlike ATM cards, which used to be free of annual charges, you pay a certain fee for using debit cards.
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Service Charges
There is a list of service charges on your debit card. These charges are on the debit card application form. You need to read these clearly as there could be some hidden charges.
If you opt for the Debit Card Plus from HSBC, then there is a higher charge of Rs.400 annually and you are allowed two transactions a month from non-HSBC ATMs. If you use a non-affiliated ATM over two times a month (as is said allowed) then you will be charged Rs.55 plus service tax on each transaction.
In case you use your card to withdraw money from an ATM that is not affiliated to your bank, then there could be a nominal charge on the debit card.
You can also ask your bank to provide you with a list of affiliated ATMs and another list on the charges when you use an ATM that is not affiliated to your bank.
Recommended Spends
A lot of your purchases could be made on impulse on your debit card. This is because you have the money in your account anyway and sometimes you don't think twice about spending it.
This means your weekly groceries like milk, vegetables, fruits and other essentials can be bought on your debit card.
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Since the debit card also doubles up as your ATM card it is easy for you to withdraw money at anytime. If you lack financial discipline, because you are probably thinking that withdrawing small amounts will not hurt your account. However if you put together all the unnecessary 'small' withdrawals, it may add up to a big amount.
Each withdrawal no matter how small will gradually deplete your account.
| Also Read: 10 Ways to Manage Money Better |
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