{"id":12264,"date":"2015-12-16T07:13:26","date_gmt":"2015-12-16T12:13:26","guid":{"rendered":"http:\/\/www.moneysmartguides.com\/?p=12264"},"modified":"2020-02-17T09:05:34","modified_gmt":"2020-02-17T14:05:34","slug":"how-to-create-your-own-debit-card-and-enjoy-the-best-of-both-worlds","status":"publish","type":"post","link":"https:\/\/www.moneysmartguides.com\/how-to-create-your-own-debit-card-and-enjoy-the-best-of-both-worlds","title":{"rendered":"How To Create Your Own Debit Card And Enjoy The Best of Both Worlds"},"content":{"rendered":"<p><img decoding=\"async\" class=\"alignleft size-full wp-image-12265\" src=\"https:\/\/www.moneysmartguides.com\/wp-content\/uploads\/2015\/12\/make-you-own-debit-card.jpg\" alt=\"make your own debit card\" width=\"350\" height=\"233\" srcset=\"https:\/\/www.moneysmartguides.com\/wp-content\/uploads\/2015\/12\/make-you-own-debit-card.jpg 350w, https:\/\/www.moneysmartguides.com\/wp-content\/uploads\/2015\/12\/make-you-own-debit-card-300x200.jpg 300w\" sizes=\"(max-width: 350px) 100vw, 350px\" \/><em>Today&#8217;s post comes from John over at 6oMinuteFinance.com. I hope you find it as interesting as I did.<\/em><\/p>\n<p>I have had to face the unfortunate situation of a stolen credit card number several times. Fortunately, I keep a close eye on my account so I quickly noticed the problem and notified my card issuer. They promptly closed the account number and whisked a new card to me in just a few days. Most importantly, all of the fraudulent charges were immediately credited from my account, never to be seen again.<\/p>\n<p>It\u2019s also a fact of life today that many people are in trouble with their credit cards. In a recently released <a href=\"https:\/\/wallethub.com\/edu\/cc\/credit-card-debt-study\/24400\" data-lasso-id=\"1143\" target=\"_blank\" rel=\"noopener\">report<\/a>, \u201c<em>CardHub now projects that we will end 2015 with a net increase of more than $60 billion in credit card debt \u2013 putting us perilously close to a tipping point at which balances become unsustainable and delinquency rates skyrocket<\/em>.\u201d CBS news <a href=\"https:\/\/www.cbsnews.com\/news\/51-percent-have-enough-cash-to-pay-off-credit-card-debt-study\/\" data-lasso-id=\"1144\" target=\"_blank\" rel=\"noopener\">reported<\/a> last year that nearly half of all Americans have more credit card debt than savings!<\/p>\n<p>It\u2019s easy to see why many would look for alternatives, the primary of which are debit cards.<!--more--><\/p>\n<p>In theory, it\u2019s understandable why some love debit cards:<\/p>\n<ul>\n<li>The purchase is debited directly from your bank account, avoiding the opportunity to spend money you don\u2019t have.<\/li>\n<li>Tracking expenses is easier as you\u2019ll see each individual transaction on your bank statement and can easily assign it to the proper category.<\/li>\n<li>No interest fees or over limit fees either.<\/li>\n<li>Plus they are normally a part of the VISA or MasterCard network, so they\u2019re accepted just about everywhere.<\/li>\n<\/ul>\n<p>Yet, I don\u2019t use my debit card. I have one as it came with my checking account, but I don\u2019t even carry it in my wallet. I\u2019m not sure I even remember my PIN!<\/p>\n<h3>Why I Don&#8217;t Use My Debit Card<\/h3>\n<p><strong>The reason is simple: Fraud protection<\/strong>. I can\u2019t erase the memory of my card being stolen and used fraudulently. Yes, I know the protection is supposed to be the same, and most debit card issuers will make you whole (if it\u2019s \u201c<em><a href=\"https:\/\/www.bankrate.com\/finance\/credit-cards\/does-zero-liability-mean-zero-liability\/\" data-lasso-id=\"1145\" target=\"_blank\" rel=\"noopener\">reported promptly<\/a><\/em>\u201d).<\/p>\n<p>My concern is that while I\u2019m waiting to be made whole, my money is not in my bank account. Debit card issuers have <a href=\"https:\/\/money.usnews.com\/money\/blogs\/my-money\/2014\/09\/22\/the-debit-card-danger-youre-probably-forgetting\" data-lasso-id=\"1146\" target=\"_blank\" rel=\"noopener\">ten days<\/a> to investigate the claim before having to return the money to the account (assuming they find a transaction was truly fraudulent).<\/p>\n<p>Depending on the size of the transaction, this could create real problems. Suppose your rent or car payment was due? What if you needed groceries and your account was just cleaned out? Sure, we should all have emergency funds (not in our checking account!) to cover things like this. But let\u2019s be realistic: unfortunately many Americans have <a href=\"https:\/\/www.forbes.com\/sites\/maggiemcgrath\/2016\/01\/06\/63-of-americans-dont-have-enough-savings-to-cover-a-500-emergency\/\" data-lasso-id=\"1147\" target=\"_blank\" rel=\"noopener\">little or no savings<\/a>. I certainly don\u2019t recommend this, but that\u2019s the reality of the situation.<\/p>\n<p>My solution: Create your own \u201cdebit card.\u201d<\/p>\n<h3>Creating Your Own Debit Card<\/h3>\n<p>What is a \u201cdebit card\u201d in reality? Quite simply, you\u2019re <strong><em>prepaying your expenses<\/em><\/strong> by depositing funds in a bank account. As you swipe your debit card, the funds are removed from the bank account and paid to the merchant. In essence, you have set aside funds to be used to cover these transactions. You can\u2019t invest or otherwise spend those dollars because they are committed to covering your debit card transactions.<\/p>\n<p>How is this different than making a large \u201cprepayment\u201d** to your traditional credit card account, then working off the credit balance over time as you swipe your card? You\u2019re still committing the funds up front to cover future spending. Those dollars still can\u2019t be invested or spent elsewhere either \u2013 this is no different than the funds in your checking account waiting to be used via your debit card.<\/p>\n<p>The big advantage is that <strong><em>when<\/em><\/strong> (<strong><em>not IF<\/em><\/strong>) your card number is stolen and misused, a simple call to your credit card issuer will remove the charge from your account, without tying up your money as they investigate.<\/p>\n<p>I\u2019ve been using this method for quite some time and it\u2019s worked beautifully. My credit card account has a credit balance currently, and when it nears zero, I\u2019ll \u201cdeposit\u201d more funds to create a new credit balance.<\/p>\n<p>I\u2019m not going into debt as I\u2019m using my own money, but I have a higher level of protection and convenience than using a traditional debit card.<\/p>\n<p>Other side benefits:<\/p>\n<ul>\n<li>I\u2019m keeping my credit score high, both through current use of the account and low (or negative!) credit utilization. I\u2019m not a big fan of the way <a href=\"https:\/\/www.moneysmartguides.com\/recommend\/creditwise\" data-lasso-id=\"1148\">credit scores<\/a> are used, but it\u2019s a fact of life so I may as well have as high a score as possible.<\/li>\n<li>I\u2019m eligible for <a href=\"https:\/\/www.moneysmartguides.com\/new-and-improved-the-discover-it-card\" data-lasso-id=\"1149\">better cash back rewards<\/a> than I have found offered for debit cards. Of course, I never make a purchase strictly because of the rewards but if you\u2019re going to buy something anyway, you may as well get a reward for it!<\/li>\n<li>Often credit card issuer\u2019s offer extended warranties on qualified purchases made with their cards. This seems to be less common with debit cards.<\/li>\n<li>If you travel, many rental car companies will require credit (not debit) cards. Some will accept debit cards, but it will require your time to locate them, and with fewer rental companies to choose from, you may pay higher rental charges.<\/li>\n<\/ul>\n<p>One word of caution: As the account is technically a credit card, you could exhaust the credit balance and keep on spending, incurring fees and interest charges along the way. <strong><em>If you\u2019ve had credit card usage issues in the past, stick to the debit card or use cash!<\/em><\/strong> If there\u2019s <a href=\"https:\/\/www.moneysmartguides.com\/avoid-debt\" data-lasso-id=\"1150\">any chance you\u2019ll find yourself in debt<\/a>, skip this idea and simply keep a minimal amount of cash in your debit-card-linked bank account. Be sure to have funds available in another account to use if your debit card number is misused!<\/p>\n<p>** To be clear: I am <strong><u>not<\/u><\/strong> talking about \u201c<em>Prepaid Credit Cards<\/em>.\u201d These traditionally have low limits and high fees. They have their place as vehicles to help repair credit problems for some people. For this post, I am referring to traditional credit card accounts only.<\/p>\n<p><strong>Author Bio:<\/strong> John Madison is a freelance CPA, <a href=\"https:\/\/60minutefinance.com\/coachingprocessexplained\/\" data-lasso-id=\"1151\" target=\"_blank\" rel=\"noopener\">financial coach<\/a> and writes at <a href=\"https:\/\/60minutefinance.com\/\" data-lasso-id=\"1152\" target=\"_blank\" rel=\"noopener\">60minutefinance.com<\/a>. John resides in Virginia with his wife and children.&nbsp; He is active in his church, enjoys finishing a good run or workout at the gym, and enjoys leading personal finance classes in the community.<\/p>","protected":false},"excerpt":{"rendered":"<p>Today&#8217;s post comes from John over at 6oMinuteFinance.com. I hope you find it as interesting as I did. I have had to face the unfortunate situation of a stolen credit card number several times. Fortunately, I keep a close eye on my account so I quickly noticed the problem and notified my card issuer. They promptly closed the account number and whisked a new card to me in just a few days. Most importantly, all [&hellip;]<\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_uag_custom_page_level_css":"","site-sidebar-layout":"default","site-content-layout":"","ast-site-content-layout":"","site-content-style":"default","site-sidebar-style":"default","ast-global-header-display":"","ast-banner-title-visibility":"","ast-main-header-display":"","ast-hfb-above-header-display":"","ast-hfb-below-header-display":"","ast-hfb-mobile-header-display":"","site-post-title":"","ast-breadcrumbs-content":"","ast-featured-img":"","footer-sml-layout":"","theme-transparent-header-meta":"","adv-header-id-meta":"","stick-header-meta":"","header-above-stick-meta":"","header-main-stick-meta":"","header-below-stick-meta":"","astra-migrate-meta-layouts":"default","ast-page-background-enabled":"default","ast-page-background-meta":{"desktop":{"background-color":"","background-image":"","background-repeat":"repeat","background-position":"center center","background-size":"auto","background-attachment":"scroll","background-type":"","background-media":"","overlay-type":"","overlay-color":"","overlay-gradient":""},"tablet":{"background-color":"","background-image":"","background-repeat":"repeat","background-position":"center center","background-size":"auto","background-attachment":"scroll","background-type":"","background-media":"","overlay-type":"","overlay-color":"","overlay-gradient":""},"mobile":{"background-color":"","background-image":"","background-repeat":"repeat","background-position":"center center","background-size":"auto","background-attachment":"scroll","background-type":"","background-media":"","overlay-type":"","overlay-color":"","overlay-gradient":""}},"ast-content-background-meta":{"desktop":{"background-color":"var(--ast-global-color-5)","background-image":"","background-repeat":"repeat","background-position":"center center","background-size":"auto","background-attachment":"scroll","background-type":"","background-media":"","overlay-type":"","overlay-color":"","overlay-gradient":""},"tablet":{"background-color":"var(--ast-global-color-5)","background-image":"","background-repeat":"repeat","background-position":"center center","background-size":"auto","background-attachment":"scroll","background-type":"","background-media":"","overlay-type":"","overlay-color":"","overlay-gradient":""},"mobile":{"background-color":"var(--ast-global-color-5)","background-image":"","background-repeat":"repeat","background-position":"center center","background-size":"auto","background-attachment":"scroll","background-type":"","background-media":"","overlay-type":"","overlay-color":"","overlay-gradient":""}}},"categories":[71],"tags":[],"disclaimer":[],"uagb_featured_image_src":{"full":false,"thumbnail":false,"medium":false,"medium_large":false,"large":false,"1536x1536":false,"2048x2048":false,"wp_review_large":false,"wp_review_small":false,"web-stories-poster-portrait":false,"web-stories-publisher-logo":false,"web-stories-thumbnail":false},"uagb_author_info":{"display_name":"Jon Dulin","author_link":"https:\/\/www.moneysmartguides.com\/author\/jon-dulin"},"uagb_comment_info":9,"uagb_excerpt":"Today&#8217;s post comes from John over at 6oMinuteFinance.com. I hope you find it as interesting as I did. I have had to face the unfortunate situation of a stolen credit card number several times. Fortunately, I keep a close eye on my account so I quickly noticed the problem and notified my card issuer. They&hellip;","_links":{"self":[{"href":"https:\/\/www.moneysmartguides.com\/wp-json\/wp\/v2\/posts\/12264"}],"collection":[{"href":"https:\/\/www.moneysmartguides.com\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.moneysmartguides.com\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.moneysmartguides.com\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/www.moneysmartguides.com\/wp-json\/wp\/v2\/comments?post=12264"}],"version-history":[{"count":0,"href":"https:\/\/www.moneysmartguides.com\/wp-json\/wp\/v2\/posts\/12264\/revisions"}],"wp:attachment":[{"href":"https:\/\/www.moneysmartguides.com\/wp-json\/wp\/v2\/media?parent=12264"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.moneysmartguides.com\/wp-json\/wp\/v2\/categories?post=12264"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.moneysmartguides.com\/wp-json\/wp\/v2\/tags?post=12264"},{"taxonomy":"disclaimer","embeddable":true,"href":"https:\/\/www.moneysmartguides.com\/wp-json\/wp\/v2\/disclaimer?post=12264"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}