Things You'll Need:
- Information about your bank's policies
- check register booklet to carry with you
- an awareness of your spending habits
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Step 1
Choose your debit card wisely. Many institutions offer cards that do not charge an annual fee, or even fees on your purchases. There is no need to have a card that forces you to pay such fees. If you already have a card, read the fine print of your offer, or call your banker or customer service representative for more information about fees you might be paying. Have them send you a copy of the fees in writing.
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Step 2
Monitor the card's policies. Be aware that policies can change. Open and read any mail that you get from your financial institutions.
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Step 3
Know whether or not your bank will allow you to keep spending even when you don't have enough money in the account to cover it. Many people assume that if a store accepts a debit card for a purchase, and the transaction goes through, then they had enough money in their account to cover it. This is not necessarily true! Some banks are now allowing charges to go through, even when there are insufficient funds to cover it. Then they charge NSF fees. Which brings us to our next step: Find out about non sufficient charge policies at your bank.
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Step 4
Find out what the non sufficient funds fee is at your local bank, and find out if you have overdraft protection. Overdraft protection may not be a good thing to have on an account that is associated with your card, because it may actually allow you to charge more things to your card even after you have no funds, draining a second account, and still allowing fees to kick in.
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Step 5
Find out what order your bank uses to clear transactions. An article on Creditcard.com points out that some banks clear debits in the order in which they are received. Some clear the debits in order from lowest amount to highest amount. Others clear highest from amount to lowest. Pay attention to this. It matters because it your bank clears debits in order from largest to smallest, then you may incur more NSF fees. Here's why: If you buy 4 items in one day, for example, a $100 item, a $25 item, a $5 item and a $2 item, and you only have $100 available in your account that day, you would incur three non-sufficient funds fees that day, if the bank clears the purchases in order from larges to smallest. If they clear from smallest to largest, then the $2 item, the $5 item, and the $25 item would all clear, leaving only one NSF fee. See creditcard.com for a clear explanation of this.
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Step 6
Carry a check register booklet with you at all times. Take a moment and write down purchases in the booklet, and then bring your balance up to date. Remember that if you call your bank to find out your balance, you may still not have enough funds to cover your transactions, because the balance that the bank gives you does not account for transactions that you have made, but that they are not yet aware of. For example, you may have automatic payments that deduct monthly from your account, that have not yet gone through. You may have checks floating around that you have written, but that haven't been cashed by the receivers. Smaller merchants may also not process your debits the moment you make them, so those transactions may go through without warning, after you already assumed that your available balance had accounted for them. Which brings us to the next step: Reconcile your account every month.
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Step 7
Reconcile your account every month. This is different from keeping a running balance of how much you have spent and how much has come in. Reconciling actually compares what the bank has cleared to what you have written in your check register. If you don't know how to reconcile your account, then it is time to learn.
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Step 8
Finally, be aware that debit cards make spending easier. People spend more freely when they have plastic in their hands. Whether it's credit or debit, you may find yourself spending a lot more if you aren't careful.
