When compared with credit cards, debit cards seem to present consumers with the best of both worlds: the ability to securely store their money in a bank account while retaining access to said money whenever they choose. But you might be wondering if there are any limits to your transactions

The truth is, however, that debit cards have restrictions just as credit cards do. These limits are set by your bank or card provider and may vary depending on the type of card, the account balance, the merchant or the ATM network.

Below is a list of some of the common types of limits on debit cards and how they work.

Spending limits.

Many debit card users are under the impression that since their debit accounts have been filled with their own money, they have full rights to spend as much of it as they want in any given day. Why should they be restricted from making big ticket purchases within the course of a single shopping trip if that is what they wish to do? This may make logical sense but the reality is different.

The majority of banks place a daily spending limit on debit card accounts which caps their total possible amount of purchases within a calendar day. The spending ceiling can also vary between banks. Some set the limit at $1,000, others at $2,000 and still other banks allow up to $3,000 worth of charges in a day.

The most important reason why banks do this is to prevent fraud from occurring on the debit account. Since most debit accounts do not offer the liability protection which is common to credit cards, banks instead place a spending cap which, from their point of view, the customer is likely to never reach.

Whilst some banks may be willing to work with the account holder in removing the limit or raising it, the best course of action for potential customers is to inquire about such limits before they open an account.

Withdrawal limits.

Similar to the daily spending limit, many debit card accounts also place a ceiling on the amount of money that an account holder can withdraw in a day from ATMs and cash machines. Some banks may have a lower limit for Visa or Mastercard debit cards than for EFTPOS cards.

The standard withdrawal limit is typically set at or around $500, but like many of the specifics in a card holder agreement, this amount may vary from bank to bank. Much like the daily spending limit imposed on point-of-sale transactions, withdrawal limits can also be raised after an inquiry from the debit account holder.

The limit is designed to protect your money from unauthorised transactions and fraud. If your card is lost or stolen, the thief can only access a limited amount of your funds. However, the withdrawal limit can also be inconvenient if you need to make a large purchase or pay a bill in cash. In that case, you may want to increase your withdrawal limit temporarily or permanently.

Merchant limits

Some banks and debit card providers will set the maximum amount of money you can spend with your debit card at a specific merchant or category of merchants. Some banks may impose a lower limit for online purchases or gambling transactions than for other types of purchases. If you have a gambling limit imposed, consider seeking professional help and support.

How to increase your limit

You’ll need to contact your bank and request your daily limit be changed. You can do this via your banks app, or their website. If you need to go higher than the allowed amount in the app, you may need to give them a call. You will need to provide some personal information and verification to prove your identity and confirm the change. Some banks may charge a fee for increasing your withdrawal limit, while others may offer this service for free.

TIP: If you do increase it, set a reminder to lower the limit once you’ve completed your transaction.

Alternatively, you can use other methods to access your money without exceeding your withdrawal limit. For example, you can use online banking or mobile apps to transfer money to another account or pay bills electronically. Another idea is to split the transaction over multiple accounts. For example, if your transaction limit is $1,000 and you want to buy a laptop for $1,200, you could pay for it with two separate cards.

Limits on debit cards are important for both yourself and the bank. They can help you not overspend or go into overdraft and also from potential fraud.