Debit Cards & Checks

Using a Debit Card

You can use a debit card to withdraw money from you checking account at an ATM machine or to make Point-Of-Sale (POS) purchases in a store. When you use your debit card, the money is taken directly from your checking account and used to pay for your purchases.

Some financial institutions (FI) limit the number of ATM or POS withdraws you can make per month and may charge you a fee if you exceed this limit.

You may also be charged if you use an ATM that does not belong to your financial institution – which means you may be charged by the FI that owns the ATM can AND you might also be charged by your own FI. To avoid fees, find out which ATMs you can use free of charge or, if possible, make a POS purchase and ask for cash back.

Writing Checks

Most people will use their debit card more than they will write actual checks, but it’s important to have a checkbook and know how to use it. Below are some examples of when you may need to write a check:

• Paying Rent
• Utility Bills
• Loan Payments
• Mortgage Payments

Writing checks sounds self-explanitory, and it is (for the most part)... but there are a couple places that you don't want to go wrong. For instance, when writing the amounts, don't leave any space for another person to add numbers. Write clearly and draw a line through unused space.

The following graphics explain the parts of a check and illustrate the correct way to write a check:

• Learn about the parts of a check.
• View a sample of a well-written check.

Balancing Your Checkbook

Balancing your checkbook is a quick & easy way to track how much money you have in your account to ensure that you will not overdraw your checking account. Below are some quick notes on how to balance your checkbook:

• Each checkbook comes with a check register where you can keep track of your credits & debits. (Debits are your withdrawals & credits are your deposits.)
• You will want to write the date, place, description and amount of your withdrawal or deposit.
• Don’t forget to enter purchases or ATM withdrawals that you make with your debit card.

The following samples show how to use a check register:

• Sample 1 (Easy for Beginners): This register is a good example for people who are using a register for the first time. The balance is calculated every two lines, showing the math in between. With more space between each transaction and with showing the +/- amount in the balance column, you'll be more likely to catch any errors.
• Sample 2 (Most Common Method): This register is an example of the most common way people fill in a check register. The balance is calculated on each line (no work is shown). This method allows you to record more transactions in your register.

Overdrafts

Your checking account becomes overdrawn if you spend more money than what you actually have. Overdrawing your account can be both embarrassing and costly. Most financial institutions will charge you for overdrafts; this could range from as little as $25 to as much as much as $75 or more per overdraft.

Some financial institutions offer overdraft protection where you can designate a certain account to draw funds from to cover the negative amount in your checking. While this will help you to avoid high overdraft fees or returned checks, the overdraft transfer may still cause you a smaller fee to be charged.

Debit Cards vs. Credit Cards

There is a BIG difference between debit and credit cards.

A debit card allows you to make purchases and ATM withdrawals using the money that you already have in your checking account. The money is withdrawn from your account at the time of the transaction.*

A credit card is a line of credit (type of loan) that allows you to make purchases with money that you do not have. This money must be re-paid and you will be charged interest on the balance that you carry. If you pay each balance in full, interest will not accrue.

It is important to remember that since a debit card draws the money directly from your checking account, using a debit card will not help you to build credit.

*Sometimes there may be a delay in processing – For example, a purchase on Monday may come out of your account on Tuesday.