Checking Accounts and Debit Cards

by: Maryam Siddiqui

What is a checking account and a debit card?

A checking account is an account in which you place your money in an account and pay for things using a check. The money is withdrawn from the checking account using a check.

A debit card is a card where payments can be withdrawn from a savings account using the card.

* A savings account is an account that allows you to place your savings in a bank account and you can add to it as you get more money.

How do I get started and what should I look for when investing in a checking account and a debit card?

When investing in a checking account, you should get all the information possible. Make sure that you know what fees need to be paid and when. For instance, if you bounce a check, you may have to pay a certain amount.

With a debit card, make sure there is a minimum balance that it is your savings account to be able to have a debit card.

What are the potential dangers of each?

With the checking account, if you do not practice good money management, then you can end up paying many expensive fines. For example. if your check is bounced (you can't pay the full amount of a check), then either you will have to pay a penalty fee or you will not be allowed to open another banking account.

With a debit card, there is also a fee if you try to overdraw money. For example, if you run out of money in your savings account, and you try to use your debit card, you may have to pay a large fine to borrow money from the bank.

What are the benefits of each?

With both, there is a great benefit of convenience in that you do not have to carry a large amount of cash wherever you go, as a debit card or a checking account allows you to make payments without physical cash with you.

Another benefit in regards to the checking account is that you can use an ATM, a machine that allows you to withdraw money and gain access to cash right away.

How do I best keep track of my spending?

The best way to keep track of spending is to have a budget and to keep a check register. A check register allows you to keep a list of your transactions and see how much you have spent.

What habits should I avoid?

Avoiding impulsive spending and overspending are two habits that should be avoided. This prevents from having the potential to pay for penalty fees.

What if I lose my debit card?

If you lose your debit card, immediately notify you bank so they will not hold you responsible for expenses that you are not responsible for, in case your debit card is stolen.