The introduction of online banking and the use of credit and debit cards created a platform for the emergence of a cashless policy. Nowadays, people don’t carry cash around; instead, they move around with their cards (credit or debit). A debit card works in a very easy-to-understand way. You make a transaction that is authorized by inputting your pin, and the money is deducted from your bank account. However, do you think it’s possible to make such a transaction even with insufficient funds in your account?
You cannot use a debit card to perform a transaction when you have no money in your bank account unless it has an overdraft limit set on it by the issuer. For a transaction to be successful when using a debit card without an overdraft limit, you must have adequate funds in your bank account.
The significant difference between a credit and a debit card is in how transactions are processed. If you purchase an item using a debit card, the funds for the purchased item will be withdrawn from your bank account. However, it is quite different when you use a credit card. Funds for a transaction made with credit card are usually lent to the card owner by card issuers. As we move on in this article, you’ll have more insights regarding the question of using a debit card when you have no funds in your account.
Can You Use a Debit Card With No Money in Your Account?
Debit cards are plastic cards used to carry out transactions (both online and offline). These cards can be gotten from institutions like a bank or credit union when creating a checking account. Sometimes, you don’t get charged when you use a debit card to perform a transaction; other times, you are charged. A debit card is similar to a credit; however, they operate differently. Credit cards operate based on borrowed funds, while debit operate based on funds in your account.
Unlike a credit, a debit card doesn’t allow users to go into debt, aside from little negative balances that may be incurred if the account holder has registered for overdraft protection. Debit cards come with a daily purchase threshold – this means that, after the threshold has been met, you won’t be able to use your debit card to make purchases that day. On the other hand, credit cards also have limits, and it is widely regarded as credit card limits.
Because a credit card uses borrowed money to fund a transaction, you can use it to purchase an item regardless of how much you have in your bank account. So, for instance, if you want to pay for some grocery items and you have no cash in your account, you can hand over your active credit card to the cashier at the counter and pay for the bought products. But, while this is possible with a credit card, it is impossible to attempt such using a debit card (without an overdraft limit).
You cannot use a debit card to make a transaction when you have no funds in your account. It is like attempting to purchase a product when you don’t have a dime on you. If you end up giving it a try, your card will be declined based on insufficient funds. Trust me, when this happens, especially in a popular and crowded retail store, you might end up feeling embarrassed. I bet this is not something you would like to experience. So always ensure that your account is well-funded before you make a transaction.
If you wish to make transactions with your debit card even when you have nothing in your account, I suggest you sign up for overdraft protection. With overdraft protection in place, debit card transactions that exceed the balance in your checking account will be approved. It is that simple. If you have this protection, you’ll be able to purchase that dash egg cooker that cost $100 even if you have less than that amount in your bank account.
Not all banks offer overdraft, so ensure you check in with your bank to determine your standing regarding overdraft protection before considering applying for one.
Will a Debit Card Let You Overdraft?
It is the wish of all individuals to perform a transaction without any hindrance. However, sometimes, achieving such a dream is often difficult. Situations like doubt charges, failed transactions, and insufficient funds usually frustrate individuals. One common solution to one of these frustrating issues is an overdraft. But, to adopt this measure, you need to ask yourself one crucial question. Will a debit card let you overdraft?
Some debit cards will definitely allow you to overdraft if they have an overdraft limit. This feature will enable you to make purchases or transactions even when you have insufficient funds in your account. Overdraft protection is not offered by all banks, and they are limited to debit cards.
How would you feel if you could buy a product worth $200 even when you have less than $20 in your bank account? It seems cool, right? Well, that is what overdraft protection offers you. With overdraft protection, you’ll be able to complete a purchase with your debit card even if the funds in your account not sufficient enough to complete the transaction.
Overdraft protection comes with several benefits. First off, this feature can save you from lots of embarrassment that comes with a bounced check. As cool as overdraft protection sounds, getting one isn’t easy. You’ll need to be deemed worthy of this package before your bank agrees to provide you with the protection.
Conclusion:
The funds for debit card transactions are always deducted from your bank account. In contrast, the funds for credit card transactions are usually borrowed from your card issuer. This means it is impossible to make a transaction when you have insufficient funds in your account.
While this is very much possible with a credit card, it is not possible with a debit card because funds needed to complete a transaction are usually taken from your bank account. So, if you wish to use your debit card even when you have no money in your account, I suggest you consider overdraft protection. If overdraft protection doesn’t sit well with you, then you’ll have to ensure that your account is always well-funded.
