Do debit cards have spending limits?
Yes, most financial institutions set a debit card daily limit on debit card withdrawals. This is done to ensure that the checking account associated with the debit card is safe and cannot be emptied in the event a person’s debit card is lost or stolen.
Most debit cards have daily spending limits, usually between $400 and $5,000 to prevent fraudulent spending. Some financial institutions may also impose a debit card transaction limit.
At Credit Union of Southern California (CU SoCal), we make it easy to get debit a card.
Call 866.287.6225 today to schedule a no-obligation consultation and learn about our mortgages, home equity lines of credit, auto loans, personal loans, checking and savings accounts, and other banking products. As a full-service financial institution, we look forward to helping you with all your banking needs.
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Why debit cards have spending limits
While a daily spending limit may seem like an inconvenience, this policy protects your account from fraud in the event a thief or hacker gets a hold of your debit card or card number.
All financial institutions have a debit card limit per day on ATM withdrawals, and the amount varies depending on the policy of your credit union or bank. Some financial institutions will include debit card ATM withdrawals in your debit card daily limit.
Did you know if you try to spend more than the spending limit, your debit card may decline,
even if you have money in your account?
How to find your debit card spending limit
To find your debit card daily limit, you will need to contact your credit union or bank and speak to an account representative.
CU SoCal Members can find out their debit card daily limit by calling 866.287.6225. CU SoCal hours are Monday-Friday from 9 a.m. to 6 p.m., and Saturday from 9 a.m. to 1 p.m.
How to increase your daily spending limit
You may be able to increase you debit card daily limit, depending on your financial institution’s policies and your account standing.
Follow these steps for how to increase debit card limits:
Find your daily spending limit. Contact your credit union or bank to get your limit.
Request an increase. Ask the account representative about the process for increasing your limit. You may need to send a letter explaining why you want to increase the limit.
Increase timeframe. If approved, the financial institution will likely discuss with you whether a short-term or long-term limit increase is needed. These decisions on what is allowable may be based on your account status, funds in the bank, and other factors.
Debit cards vs credit cards: which is better?
There are pros and cons to using a debit card versus a credit card:
Debit card pros and cons
Pros:
- Easy-to-obtain. Debit cards are provided for free when you open a checking account.
- Convenient. With a debit card, you don’t have to worry about having cash on hand.
- No annual fees. Most financial institutions do not charge annual fees on a debit card.
- Great for budgeting. Your total spending is limited by the amount of money you have in your linked checking account. This helps you curb spending, which is a great way to save money to pay bills.
- Cash withdrawals. Debit cards provide easy access to your cash when you use the card at an ATM or at the cash register.
Cons:
- Not as secure. Because a debit card is linked to your checking account, your accounts are more vulnerable to an unauthorized transaction and fraud, especially if your card is lost or stolen and gets into the hands of a dishonest person.
- Daily spending limit. Debit cards tend to have a lower daily spending limit than the credit limit on a credit card.
- They don't build credit. Credit cards are a type of revolving credit, provided by a creditor. Making on-time bill payments can help you build your credit. Debit cards are linked to a personal checking account and do not build credit.
- Limited fraud protection. If your wallet and debit card are lost or stolen, your card could be used, and your checking account depleted through unauthorized purchases. A thief could also access your checking account. Never keep your debit card PIN number in your wallet with your debit or credit cards.
- Overdraft fees. If you use your card to make a purchase and there aren’t sufficient funds in your checking account to cover the charge, an overdraft fee will likely be charged on your account. Some financial institutions provide overdraft protection options, so you don’t have to pay a penalty.
- Spending is limited. Debit card withdrawals and transactions are immediately deducted from the checking account associated with your card. This limits the amount of money available for purchases; you can’t spend more money than you have available.
- ATM fees. Many ATMs charge fees. Your financial institution may have a partnership with a particular ATM network and through this arrangement provide free transactions. However, be sure to check which networks are free for you and which aren’t.
Credit card pros and cons
Pros:
- Rewards and cash back. Most credit cards come with purchase incentives that earn rewards points or that you can request as cash back.
- Build credit. Responsible use of a credit card can help you build credit. On-time (and late) bill payments are reported to the credit reporting agencies. Paying on-time helps increase your credit score.
- Purchase power. Credit cards have high credit limits which can be as high as $100,000. However, the average credit limit is closer to $30,000. This makes it possible to make large purchases and pay them back over time. Due to high interest rates charged by credit cards, if you need a large sum of money you may be better off with a home equity loan, home equity line of credit (HELOC), or a personal loan.
Cons:
- Fees. Banks may charge several types of fees—from interest charges to late payment fees—based on how well you manage your account.
- Interest on balance owed. If you do not pay your entire bill in full each month you will pay interest on the outstanding balance. Credit cards charge high interest on balances carried month-to-month.
- Overspending. Credit cards come with a credit limit which makes it possible for people to spend more than they can afford to repay. If you fail to pay your bill on time this will be reported by your bank to the credit bureaus and your credit score will be damaged.
When to use a debit card vs. credit card
Use your debit card for:
- Easier budgeting. Debit card transactions are withdrawn from your account within a few hours or within a day or two. This makes budgeting easier because you’ll know exactly how much money you have available in your account.
- Supporting small businesses. All merchants pay fees to credit card companies for utilizing credit card services, but do not pay fees on transactions their customers make with a debit card. Using a debit card saves merchants some money.
- Rewards. Most credit cards and some debit cards earn points and rewards, so you may want to weigh which of your cards gives better rewards and earnings. For example, CU SoCal’s Rewards Checking Account offers a monthly dividend on average account balances, reward points on debit card purchases, and fully-managed identity theft recovery services.
Use your credit card for:
- More purchase power. Credit cards are best used for making expensive purchases, such as new furniture, appliances, home renovations, air fare and vacations, and for making online purchases.
- More time to pay. You’ll have a full billing cycle to add money to your checking account before your bill payment is due.
FAQs
Can a debit card be used as a credit card?
Yes, using a debit card as a credit card is easy, simply select “credit” on the payment terminal at point of purchased when you shop. The only difference
between selecting debit and credit is there will be a short delay in the processing of the transaction, from a few hours to several days.
Do debit cards have fraud protection?
Yes, the financial institutions that issue debit cards have
debit card fraud protection measures. You can prevent fraudulent charges on your debit card and debit card scams by following the precautions outlined in this article.
Do debit cards have rewards?
Yes,
rewards debit cards are typically linked to a checking account. Debit card rewards programs are incentive programs that allow you earn rewards based on the dollar amount of your purchases.
Is it safe to use a debit card to make purchases online?
Debit cards are generally
safe to use online; however, there are precautions you should take to help ensure your transactions are as secure as possible.
How old do you have to be to get a debit card?
Debit card age requirements are set by each financial institution. Typically, the age to get a debit card is anywhere from 13 to 18 years old.
What is a CVV on a debit card?
A CVV number ("Card Verification Value") is a three-digit number printed on the back of VISA®, MasterCard®, and Discover® debit and credit cards. American Express® branded credit and debit cards have a four-digit code.
What should I do if my debit card is lost or stolen?
If your debit card is lost or stolen, you should report it to your financial institution immediately so the card can be deactivated. A new card with a new number will be issued to you. If your debit card is lost outside of your home, you may request that the card be deactivated. If you think your card is misplaced, you can call your financial institution to ask that the card be temporarily frozen until you locate it to prevent unauthorized charges from going through. Using your financial institution’s mobile app or online banking platform, you can
freeze the card yourself and unfreeze the
debit card when you find it.
Why savvy consumers choose CU SoCal
For over 60 years CU SoCal has been providing financial services, including mortgages, Home Equity Loans, HELOCs, car loans, personal loans, credit cards, and other banking products, to those who live, work, worship, or attend school in Orange County, Los Angeles County, Riverside County, and San Bernardino County.
Please give us a call today at 866.287.6225 today to schedule a no-obligation loan consultation with a CU SoCal Member Services specialist.
Get Started on Your Checking Account Today!