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Written by Sophia Acevedo, CEPF; edited by Jasmine Suarez
2022-01-20T19:06:24Z
- What kinds of debit cards are there?
- Debit card purchase limits of the biggest banks
- What is a debit card good for?
- Tips for choosing and utilizing debit cards
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- Checking accounts and many money market accounts come with traditional debit cards.
- Most financial institutions will allow you to spend between $400 to $25,000 daily on debit cards.
- If you're making a big purchase but want an extra layer of security, use a credit card instead.
- Compare the best checking accounts for debit cards.
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Debit cards make for an easy way to make purchases — you're not borrowing credit, and your money is all safely stored at a bank. While debit cards are beneficial to use, they may not be ideal for all purchases, though.
Debit cards have limits for how much you can spend daily. Sometimes, it also might be better to use a credit card instead.
We'll walk you through what you need to know about debit cards, purchase limits, and how to manage them efficiently.
What kinds of debit cards are there?
There are two types of debit cards available at financial institutions: traditional debit cards and prepaid debit cards.
- A traditional debit card usually comes as part of a checking account or money market account. With a traditional debit card, you may withdraw money from your bank account and use it at any time.
- With a prepaid debit card, you put a certain amount on the debit card before you use it. A prepaid debit card may be reloadable, but it's usually not linked to a checking or money market account.
Debit card purchase limits 25 of the biggest financial institutions
Financial institutions set limits to make sure your money is safe. As a result, debit cards come with daily spending limits.
Below, you'll find debit card purchase limits from 25 of the biggest financial institutions.
| Financial institution | Debit card purchase limit |
| Alliant Credit Union | $300 to $2,000 |
| Ally | $5,000 |
| America First Credit Union | $5,000 to $7,000 |
| Axos Bank | $2,500 |
| Bank of America | $1,000 to $5,000 |
| Bethpage | $2,500 |
| Capital One | $5,000 |
| Chase | $400 to $7,500 |
| Citibank | $5,000 to $10,000 |
| Citizens Bank | $500 |
| Connexus Credit Union | $3,000 |
| Discover Bank | $2,500 to $5,000 |
| First-Citizens Bank | $500 |
| Huntington Bank | $400 |
| KeyBank | $2,500 |
| Navy Federal Credit Union | $3,000 to $5,000 |
| Pentagon Federal Credit Union | $2,500 |
| PNC Bank | $1,000 to $2,000 |
| Regions Bank | $5,000 |
| Security Service Credit Union | $12,000 |
| TD Bank | $2,000 |
| Truist Bank | $3,000 to $25,000 |
| US Bank | $10,000 |
| Wells Fargo | $600 to $10,000 |
| Wings Financial | $2,500 |
Some banks have multiple debit card options or offer higher withdrawal limits will more specialized bank accounts. If you'd like to know the spending limit for your card, you'll have to check with your financial institution.
If you plan to make a purchase that exceeds your daily limit, banks and credit unions allow you to request a temporary increase in advance.
What is a debit card good for?
Marguerita Cheng, CFP, RICP, and chief executive officer at Blue Ocean Global Wealth, says debit cards are ideal for beginners learning to budget and manage money independently. "I think debit cards can be really helpful when people are starting their first job, or they're a young professional, and their finances aren't as complicated," says Cheng.
Cheng says debit cards may not be the best option for purchases that need additional security, like electronics. If you're making a big purchase, a credit card often serves as a more suitable option instead of a debit card. "Credit does give people more security if you don't get your goods. It's also easier when you're you're buying things online," says Cheng.
Tips for choosing and utilizing debit cards
When you're looking for the right card, Cheng has a few tips to make sure you're thinking of all situations.
"Make sure that you know about the fees in the institution. Learn about the daily limit and transaction limit — that's important. See what services you get," Cheng says.
For instance, some banks will have special alerts or features when using the account to avoid overdraft fees. Others offer 24/7 customer service, which is ideal if typical banking hours don't work for you.
If you're more comfortable using cash for purchases, Cheng recommends starting small.
"Maybe they buy groceries every week. Using a debit card in a familiar situation like buying gas or groceries can help them feel more confident," says Cheng.
With time, you'll become more relaxed with utilizing and managing cards.
Sophia Acevedo, CEPF
Banking Reporter
Sophia Acevedo is a banking reporter at Business Insider. Sophia joined Insider in July 2021. She writes bank reviews, banking guides, and banking and savings articles for Personal Finance Insider. She is also a Certified Educator in Personal Finance (CEPF).Sophia is an alumna of California State University Fullerton where she studied journalism and minored in political science. She is based in Southern California.You can reach out to her on Twitter at @sophieacvdo or email sacevedo@insider.com.Read more about how Personal Finance Insider chooses, rates, and covers financial products and services >>Below are links to some of her most popular stories:
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Now, let's delve into the concepts covered in the provided article:
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Debit Card Types:
- Traditional Debit Cards: Linked to checking or money market accounts, allowing withdrawals and usage at any time.
- Prepaid Debit Cards: Require pre-loading a specific amount before usage, often not linked to a checking or money market account.
-
Debit Card Purchase Limits:
- Financial institutions set daily spending limits on debit cards to ensure the safety of funds.
- Limits vary among institutions, ranging from $400 to $25,000 per day.
-
Choosing Between Debit and Credit Cards:
- Debit cards are recommended for beginners and those learning to manage finances independently.
- Credit cards provide added security for significant purchases, especially for items like electronics.
- Credit cards may offer additional security in online transactions.
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Tips for Choosing and Utilizing Debit Cards:
- Consider fees, daily limits, and transaction limits when selecting a debit card.
- Be aware of additional services offered by the bank, such as alerts to avoid overdraft fees or 24/7 customer service.
- Start small and gradually increase card usage to build confidence, especially for those more accustomed to using cash.
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Expert Advice:
- Marguerita Cheng, a Certified Financial Planner (CFP) and CEO at Blue Ocean Global Wealth, suggests that debit cards are beneficial for beginners and young professionals managing simpler finances.
- Emphasizes the importance of understanding fees, daily limits, and available services when choosing a debit card.
In conclusion, the article provides valuable insights into the types of debit cards, their purchase limits, and considerations for choosing and using them. The inclusion of expert advice adds credibility to the information, making it a reliable guide for individuals navigating the realm of personal finance and banking.
