00:00 Speaker A
This week we’re bringing you everything you need to know about smart banking, and today we’re focused on debit cards. Joining me now with some of the best practices, we’ve got Mindy Neirs. She’s the principal and wealth manager over at Medora Wealth Management. Great to have you here with us in studio.
00:15 Mindy Neirs
Thanks for having me.
00:17 Speaker A
So can you start by breaking down just how debit cards work for those of us who might not be as privy or use them as frequently?
00:25 Mindy Neirs
Yeah, so debit cards are payment tools. They link to your checking account. You’ll open up a checking account with the bank. Your debit card allows you to access that money in the bank, spending it, making purchases, and making cash withdrawals.
00:36 Speaker A
Okay, it’s good to know. Nothing’s changed since I set mine up, uh, many, many years ago. We won’t disclose how many. You share three things to consider though when choosing a checking account type. Fees, interest rates, and potential cash rewards. First, how can users avoid hidden fees?
00:50 Mindy Neirs
It’s really important to read the fine print of the checking account. So, fine print might outline fees for maintenance service, for account statements being sent to you. Um, you can avoid those fees, uh, by reading about, you know, if I have regular deposits going into the account, I’ll wave, they’ll wave my fees. If I sign up for electronic delivery of my statements, they’ll wave fees. So, it’s really important to understand what the fine print says. And then also if you have questions, ask the bank and see how you can avoid those fees or if there’s another checking account that you should be using.
01:16 Speaker A
Certainly. And so with that in mind, what about interest rates? How important is an interest rate with a checking account, as it may be used?
01:24 Mindy Neirs
Yeah, it’s hard to get interest rates on checking accounts. Uh, so there’s actually two different types of checking accounts you can do. You can do online checking, you can do the traditional brick and mortar. Online checking accounts tend to have a higher interest rate. So it is important to look at that option. Uh, and then with your traditional checking accounts, you might get a higher rate. Let’s say if you open up a savings account as well attached to it and can maintain a minimum balance.
02:01 Speaker A
And so what about cash rewards? Because I, I, I feel like I’ve got this with my debit, with my debit card, but or my checking account, what are the best practices that you can share for racking up those rewards? Because I, I don’t think I’m using them wisely at all right now.
02:15 Mindy Neirs
Yeah, it depends what kind of card you get. So there are rewards cards. Actually, this is more common with credit cards. So you’ll receive rewards points for using the credit card. More and more we’re seeing it with debit cards. You can have 1%, 2% cash back, or based on your spending habits. So maybe the debit card offers, uh, cash rewards for certain category spending, restaurants, travel. So take a look at what options you have and choose the one that aligns with your lifestyle. And then a side tip is take that cash rewards and put it into your savings account, so you can start building that long-term financial plan.
03:02 Speaker A
You know, debit cards are often linked to someone’s main cash reserve. So how do you protect against fraud and scams as well?
03:10 Mindy Neirs
Yeah, and in an increasing environment where that becomes more and more important. Uh, so number one, when you get your debit card, sign it. So that’s a way to protect your card. You’re endorsing the back of it. It verifies your signature. Number two, watch out where you’re accessing your bank account, uh, where you’re logging into your account. If you’re on public Wi-Fi, do not log into your financial accounts. You want to go on a private secure network so that you reduce the chances of anyone accessing your information. And then number three is utilize your digital wallet. So a lot of your phones now have some sort of pay option. When you use your digital wallet, it’s encrypted. So there’s less of a chance for access to your actual bank account.