Checking and Debit Cards

The story: Sam’s gas station surprise

At a gas pump, Sam looks at a banking app showing a large pending hold and a much smaller available balance.

1. Narrator: Sam has $120 in checking. Before a trip, Sam fills up the car and pays at the pump with a debit card.
2. Narrator: The pump puts a $100 hold on Sam’s money, even though the gas only costs $40.
3. Sam: My app says only $20 is available. Where did my money go?
4. Narrator: The hold is pending. In a day or two, the charge posts at the real amount, $40, and the rest frees up.
5. Sam: So my available balance is what I can actually spend right now.
6. Narrator: Spend from “available,” not from memory.

What you’ll learn

1. Your money hub

   A checking account holds money for everyday spending and bills. Pay comes in, and purchases and bills go out. A debit card spends money from checking right away.

2. Pending, then posted

   A new charge shows as pending first. Days later it posts, and the amount can change. Gas stations and hotels often hold extra money until the real charge posts. Your available balance is what you can spend right now.

   Example: $120 balance and a $100 gas hold. Available: $20, until the real $40 charge posts.

3. ATM fees

   An ATM outside your bank’s network can bring two fees. One is from the ATM’s owner, and one is from your bank. Your bank’s app or website shows where its free ATMs are.

4. Lost card? Report it fast

   Debit cards have weaker fraud protection than credit cards. How much you could lose depends on how fast you report a problem. The rules are on the fact card. Alerts help you spot trouble early.

Key words

checking account

an account for everyday spending and bills

debit card

a card that spends money from your checking account right away

pending

a charge that hasn’t fully gone through yet

available balance

what you can spend right now, after pending charges and holds

Common questions

Can a debit card build credit?

No. A debit card spends your own money, so it isn’t borrowing and doesn’t show on a credit report.

Remember this

Spend from “available,” not from memory.

Try it: Pick your account alerts

1. Look at the sample banking app screens, or a real account with a grown-up.
2. Choose the alerts you’d turn on, like low balance, large purchase and deposit.
3. Say why each alert would help.

Choose the alerts you’d turn on, using the sample banking app screens, or turn them on with a grown-up if you have an account.

Live facts

Numbers that change over time, with when they were last checked and where they come from.

• Lost or stolen debit card: how much you could lose

  Source: FTC(opens in a new tab)

• Debit card error and fraud rules (Regulation E)

  Source: CFPB(opens in a new tab)