Winning The Debit Card Game

Banks in Malaysia have recently switched ATM cards to debit cards.

For those without credit cards, this could be a good move as one need not be lugging around wads of cash shopping for big-ticket items.

I am not sure if banks here allow for overdraft if there is insufficient fund, but in the US, banks extend the overdraft facility, though not without a penalty, of course. Here is a scenario:

When Peter Means returned to graduate school after a career as a civil servant, he turned to a debit card to help him spend his money more carefully.

So he was stunned when his bank charged him seven $34 fees to cover seven purchases when there was not enough cash in his account, notifying him only afterward. He paid $4.14 for a coffee at Starbucks — and a $34 fee. He got the $6.50 student discount at the movie theater — but no discount on the $34 fee. He paid $6.76 at Lowe’s for screws — and yet another $34 fee. All told, he owed $238 in extra charges for just a day’s worth of activity.

So, debit cards are swell if you spend within what you have but could be disastrous if otherwise. Like overspending on credit cards, overspending on debit cards will only be a Boon for Banks.

NY Times offers some tips on how to win at the Debit Card game. Click on image below to activate video.

Teach your child how to manage money responsibly

Recently, the government announced a pay-rise for civil servants. This is welcome news for this group of folks as prices of everyday items have gone up significantly, for instance, a glass of iced-milo has gone up to as much as RM2.00. Petrol is another monster and highway tolls are not called tolls for no reason.

A colleague was lamenting about her children requesting for an increase in their allowance. This has been twice in six months! They have been doing chores around the house to get some extra allowance. They have also been doing chores in their neighbourhood including some babysitting and gardening. At times, my colleague was wondering how her children spend their money and she is thinking about getting them each a debit card, probably
Teen Visa so that she can track their spending and perhaps help them manage their allowance better.