Released: January 10, 2006

Use Debit Card to Put Lid on Spending

MANHATTAN, Kan. – Using a debit – or check – card can typically simplify transactions wherever credit cards are accepted, but limit spending to the money in your checking account, said Carol Young, Kansas State University Research and Extension financial management specialist.

For all practical purposes, a debit/check card is a plastic check that can eliminate the need to carry your checkbook or a large amount of cash, she said.

Using a debit card usually requires a personal identification – or PIN – number, but there’s no need to provide additional personal information such as your address, telephone number, second form of identification or wait for your check to be approved.

The money will be withdrawn from your account at the time of the transaction, even though some businesses may process debit card purchases as a credit transaction for their own accounting purposes, she said.

Spending more than the funds available may result in a refusal or overdraft charge, so it’s important to enter expenditures in a check register and keep tabs on your balance, Young said.

Debit card users typically receive a bank statement listing paper checks and debit card transactions, and balancing your account each time you receive a statement is advisable, she said.

Parents who are teaching teens about managing money may find a debit card helpful in the process, Young said. “If a child is expected to pay for certain expenses, a debit card will offer the opportunity to plan and practice spending without the risk of carrying cash. Spending also will be limited to the account balance.”

Many debit cards also function as an ATM (automatic teller machine) card, Young said.

For more information on choosing and using a debit card and managing money successfully, check K-State Research and Extension’s Web site: www.oznet.ksu.edu/financialmanagement/ and click on Kansas Saves, a campaign to encourage savings and reduce -- or manage -- debt successfully. The financial management campaign is part of a larger national effort called America Saves and sponsored by the Consumer Federation of America. Information on basic money management also is available at local and district K-State Research and Extension offices.

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K-State Research and Extension is a short name for the Kansas State University Agricultural Experiment Station and Cooperative Extension Service, a program designed to generate and distribute useful knowledge for the well-being of Kansans. Supported by county, state, federal and private funds, the program has county Extension offices, experiment fields, area Extension offices and regional research centers statewide. Its headquarters is on the K-State campus, Manhattan.

Story by:
Nancy Peterson
nancyp@oznet.ksu.edu
K-State Research& Extension News