A debit card lets you spend your own money everyday, online and overseas. Here is your guide to choosing the best debit card for your needs.
What is a debit card and what does it allow you to do?
When you open an Australian bank account to handle your financial transactions, the bank will issue you a debit card to use as a way to access your money. This small piece of plastic is able to help you get cash, make purchases and manage your money. The debit card is linked to your transaction account and the terms and conditions associated with your account explains how you can spend your money.
Your debit card is linked to your everyday bank account and can be used to make withdrawals from ATMs and other means such as EFTPOS, PayWave or PayPass. A debit card works similarly to a credit card, except that you’re using your own money instead of the banks' which means you don't need to worry about interest payments.
It's a good way to take advantage of the accessibility of a credit card, without having to pay any interest on the amount spent, or worry about your credit rating.
Can I choose my own PIN for my debit card?
Yes, in fact, most banks encourage that you change your PIN regularly for security reasons. When you receive your debit card in the mail, your bank will provide you with a pre-selected PIN and instructions on how to change it.
What bank accounts can I link to my debit card?
You can link almost any everyday transaction account to a debit card. The general rule of thumb is that it needs to have an Australian BSB and account number, must be in the same name as what's on the card and can be a joint account if you wish.
How do I open a debit card?
You can open a transaction account direct from our site, finder.com.au. Once you've selected the transaction account, click 'go to site' to complete an application. A debit card is typically sent to your residential address within 2 weeks of completing the application.
Do you compare joint accounts?
Yes, our joint bank accounts page lets you compare different types of joint bank accounts.
How do I overdraw on my debit card?
Overdrawing usually occurs when you've processed a transaction when your transaction account balance is zero, which usually brings your account into a negative balance. If you have an overdraft attached to your account, this balance starts to attract interest. It's important to try and avoid overdrawing your account because the fees can be very high, usually up to $20.
Some debit cards offers cash back on Visa payWave or MasterCard PayPass purchases under $100 in Australia. It normally applies if you've deposited a certain amount of money into your transaction account per month, usually $1,000 or $2,000 from an external account, like your pay.
Cash back usually applies to eligible purchases made through the calendar month given that the minimum deposit has been made. In the case of personal accounts, either account holder can make the deposit requirements for the cash back to apply.
How do I know if my debit card has PayPass or payWave?
Take a look at your debit card and see if it has the payWave or PayPass symbol on the front. If it doesn't you can call your bank to get a new card.
What are the features of a debit card?
When you are looking for a transaction account to help with your daily finances, the type of debit card that is issued with it should play a role in your decision:
- You can opt for no monthly fees. You can compare fee-free bank accounts here to ensure you don't get charged for having a debit card.
- Take a look at the third party logo. Having either Visa or MasterCard stamped on the card will increase the flexibility and benefits in spending that a debit card provides.
- You'll be able to use one or multiple ATM networks for free. This is linked to the bank you choose, but you will want to find a debit card that has access to a large number of ATMs for free. Bankwest and Commonwealth Bank's ATM network is currently the largest in Australia.
- You can use contactless technology. Some debit cards enable you to make purchases using Near Field Communication (NFC), usually of $100 or less, without having to swipe your card or enter a pin. This function is usually called Tap&Go and lets you pay for items by holding your card to a reader.
- There is fraud. As a link to your transaction account, you will want to ensure that your debit card is protected from fraud. Make sure you have a PIN number set and keep your debit card safe.
- There's usually a range of security measures in place. Check what security features your bank provide with your debit card. You debit card should have secure PIN and CHIP technology. Also, ask if you will be held responsible for unauthorised charges.
- Debit cards for teens. As a student, you can receive a range of benefits from your debit card, including no monthly fee.
What is debit card fraud?
When someone else obtains your card details and makes transactions on your card without you knowing. If you report a fraudulent transaction on your card, your bank should deactivate your card to prevent the person from making anymore transactions.
You should always regularly check your debit card statement to make sure all the transactions on there are legitimate. This will help you identify any unusual activity.
Lost or stolen cards
If your card is lost or stolen, let your bank know straight away even if your overseas. In most cases, you can get a replacement card as soon as possible and your bank can stop all transactions on your account.
Can I get a refund on fraudulent transactions?
This depends on your bank and the situation. Many of the bigger banks, such as the big four, offer a 100% money back guarantee on fraudulent transactions if you comply with card conditions of use. For more information, speak to your financial institution.
What are the advantages of using a debit card?
- You have easy access to cash. Your debit card allows you to withdraw money from your account without having to go inside of a bank branch.
- You make purchases overseas or at your local shops. With a debit card you don’t need to carry cash in order to make purchases.
- You can shop online. If your debit card has a credit card logo, you can use it to make purchases online.
What are the drawbacks of using a debit card?
- There are usually monthly fees. You will need to read the conditions carefully for your debit card to find out what types of fees are charged for its use.
- You have to use an ATM in your network. Banks have their own network of ATMs, and using your debit card outside of the network could result in added charges to your account.
What are the dangers of using a debit card?
As a link to your personal or business funds, you should be careful in the way that you use your debit card. Some things to avoid are:
- Overdrawing too much and being charged dishonour fees. If you are not keeping careful track of the money available in your bank account, you may accidentally go over the limit which could result in bank fees.
- Ensuring it doesn't get lost or stolen. If your debit card is lost or stolen and because your debit card is linked to your transaction account, you could have your funds withdrawn without your permission. Luckily, banks today have technology to identify unusual transactions and tend to notify you right after it’s happened.
What should I do if I’ve noticed my Visa or MasterCard accounts being displayed incorrectly online?
First check your recent receipts, and transactions made by any of your additional cardholders. If there is still a discrepancy, contact your bank immediately in case your account is being used fraudulently.
Why do banks approve transactions when I don’t have sufficient funds? Is there any way to stop this?
This could be the result of a direct debit that posts at the same time as a purchase or credits to the account not clearing as quickly as you thought. You can avoid paying overdrawn account fees by applying to have an overdraft account.
I've tried to deposit money into my debit card using an ATM but it's miscalculated the money. What should I do?
If this occurs, try to contact your bank as soon as possible to notify them of the problem. They should be able to get in touch with the branch who holds the ATM and sort it out.