DebitSavvy Blog

A new way to talk debit

Part 2: FAQ Refresh

Posted by DebitSavvy Team on May 1, 2013 Comments (0)
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We continue our three-part financial literacy series this month with an FAQ refresh from questions submitted by our readers. Below are answers to some of the most common questions we’ve received throughout the last year. Not seeing your question answered here? Leave it in the comment section for us!

Part 2: FAQ RefreshShould I choose debit over credit?

This is a complex question. Credit cards have their benefits and there are definitely situations where they are useful. But it’s also possible to acquire extra debt through the use of credit cards. You don’t have to worry about that with debit, and that’s a big reason why we encourage you to build your financial lifestyle around the use of debit cards. Debit requires you to be smart about your finances because you can only spend money you have in your checking account. When managed the right way, debit cards allow you to be completely in control of your spending and keep you out of unnecessary debt.


How does overdraft protection work?

This varies a little among types of checking accounts, so be sure to check with your financial institution for its specific policy. Generally, an overdraft protection program provides a bit of a safety net if you accidentally spend more money than what is currently in your checking account by rolling over funds from your savings (or other account) to cover the difference. Be careful when signing up for overdraft protection, though, as there are frequently fees associated with this service.


Does debit help increase my credit score?

Not exactly. Using your debit card does not directly affect your credit score. However, using debit cards to make payments does help keep you from spending money you don’t have, which helps keep you out of debt. Carrying debt is one of the factors that contributes to your credit rating, so the more you use your debit card to keep yourself out of unnecessary debt, the better shape you’ll be in.


When is the “right” time for me to begin putting money in my savings account?

This is an important question as it can sometimes be difficult to see the value in monthly contributions to savings, especially if you haven’t even decided what you’re saving for. The truth is that you should really begin putting money aside as soon as you start earning a steady monthly paycheck. Even if you haven’t decided on long-term financial goals, it’s so important to have a little cushion for the unexpected.


Can I use a debit card to pay my credit card bills?

Yes, absolutely! Actually, you can use your debit card to pay for just about any bill: rent, car, utilities, etc… And debit is just as easy to use for every day purchases like your morning coffee or the gas for your car. Debit is a great, flexible way to make payments using funds in your checking account.


Is it really THAT big of a deal if I keep my PIN in my wallet?

YES! One of the biggest benefits of managing your money through debit is the level of security your secret PIN provides. No one can access your funds but you because only you should know your PIN. Keeping your PIN in your wallet (where you also keep your debit card itself) makes it pretty simple for a thief to access your funds should your wallet be lost or stolen. We’ve got lots to say on this topic…check out more PIN security tips here!


What do I do if someone copies down my debit card number and accesses my funds, but doesn’t actually steal the card?

Call your financial institution ASAP. You don’t have to actually have a missing card to instruct your financial institution to deactivate the card and send you a new one.


Can I use my debit card to carry a line of credit that I pay back later?

No, debit cards do not carry lines of credit. The great thing about debit is that it only uses the funds you currently have in your checking account. This encourages you to be a more thoughtful spender and helps you avoid spending money you don’t have.

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