Many debit card users assume that they cannot go into debt since they use their own money. But if your account has an overdraft set up, you might end up owing interest on your debt. Overdrafting is the principal means of falling into debit card debt, and the resulting assortment of fees that can be levied against the account holder only serves to push them further into the hole. Below is a list of ways that debit card holders can find themselves instantly entangled in debit card debt.

Non-PIN Transactions

The first factor that contributes to debit card debt is the many non-PIN transactions made with a debit card on a routine basis. Whenever a PIN is required during a transaction, the funds are withdrawn from the debit account almost immediately. Immediate withdrawals can be of great assistance to the account holder when reviewing their balances, to ensure sufficient funds are available for future purchases.

When a user employs their card and is not required to enter a PIN, however, the funds typically do not clear the account for a couple of days. Sometimes, this delay can last up to a week. During this time, most debit card holders continue to use their debit cards. If they happen to make a mistake when calculating their current balance, it very well could be that the non-PIN transaction had yet to clear their account. Believing that they have more money than they really do can be very dangerous since each new purchase risks an overdraft which will result in debit card debt.

Unexpected Fees

There are, of course, times when the debit card user has painstakingly tracked their card usage, limited non-PIN transactions, and accounted for each non-PIN purchase by marking it in their ledger. They know their true debit card balance and have greatly reduced their chances of overdraft through excess spending. Yet even these responsible users are still at risk of falling into debit card debt.

Some banks charge annual fees on their debit card accounts, assessing them close to the same time each year in an effort to help their customers know when to expect them. In the event that a debit card holder approaches, but does not exceed, their limit on sufficient funds, they risk an annual fee clearing the account and instantly dropping them into debit card debt. Annual fees are not the only culprit. Banks often charge fees when their debit cards are used at a competing bank’s ATM. These fees can inflict the same damage as annual fees if the debit card user does not account for them properly against a low account balance.

Uncleared Cheques

Cheques which have not yet cleared the debit card holder’s account are by far the main culprit in leading a user into debit card debt. They are the hardest expenditure to track and the easiest to forget about when checking a current balance. While cheques written to merchants are usually processed within a week’s time, cheques written to friends or family members may not clear the user’s account for several weeks because the recipient may wait until they make their next trip to the bank or may simply forgetting that they have an uncashed cheque in their possession. The longer the cheque goes uncashed, the easier it is for the debit card user to forget to subtract it from current balances, leading to excess spending. Then, if the balance is too low when the cheque is finally cashed, the account goes into overdraft resulting in debit card debt.