Forum: money.stackexchange.com
Tags: <savings><debit-card>
Title: Debit cards as bad as credit cards?
Question: I have been saving for some time now with the aim of building up enough money to begin investment. But the problem is I keep withdrawing money with my debit card whenever i want to buy something. Would it be better if i just snapped the debit card in two, so that i can concentrate on saving, just as i did to my credit card so long ago?

Answers:
sents: text: This sounds more like a behavioral than a debit card issue to me TBH.
text: Did you put the money you're putting away into a separate savings account that you (mentally) labelled 'for investment'?
text: That's pretty much what I do (and I have a couple of savings accounts for exactly that reason) and even though I know
text: I've got $x in the savings accounts,
text: the debit card I carry only lets me spend money from my main bank account.
text: By the time I've transferred the money, the urge to spend has usually gone away, even though it often only takes seconds to make the transfer.
answer_details: author: money.stackexchange.com/users/1121/Timo Geusch
score: 7
sents: text: It's a real pain in the rear to get cash only from a bank teller (the end result of cutting the card as suggested).
text: There is a self control issue here that, like weight loss, should ultimately be addressed for a psychologically healthy lifestyle.
text: You don't mention a budget here.
text: A budget is one of the first tools necessary for setting spending limits.
text: Categorizing your money into inviolable categories, such as: savings (in a savings account separate from your debit/checking account) home auto grocery fun stuff (clothes, toys, electronics etc.) will force you to look at any purchase in context of your other needs and goals.
text: Note that savings is at the top of the list, supporting the aphorism to, "Pay yourself first."
text: Make realistic allowances for each budget category, then force yourself to stick to this budget by whatever means necessary.
text: Cash in several envelopes labeled with each category can physically reinforce your priorities (the debit card is usually left at home for now).
text: Roll remaining funds from each month over into the next month to cover irregular larger expenses, such as auto repairs.
text: What sort of investing are we talking about?
text: If you are just talking about retirement savings, an automatic deduction of just $50 to a Roth IRA account at a discount brokerage
text: every pay check is a good start.
text: An emergency fund of 6 months expenses is also common financial advice, and can likewise be built from small automatic deductions.
text: In defense of wise use of plastic, a debit card can be a great retroactive budgeting tool because it records all spending for you.
text: It takes a lot more effort to save and enter receipts for cash, and a compulsive spender without a budget is just as likely to run out of money whether or not he uses plastic.
text: You could keep receipts in the envelope you take the cash out of when you're getting started.
text: If you are so addicted to spending that you must cut your debit card to enforce your budget, at least consider this a temporary measure to get yourself under control.
text: When the bank issues you a new card, re-evaluate this decision and the self control measures you've implemented to see if you've grown enough to keep the card.
answer_details: author: money.stackexchange.com/users/931/SpecKK
score: 7
sents: text: If your goal is to make it harder for you to use to make impulse purchases then YES.
text: Having to always have cash for purchases will make you less likely to make impulse purchases you don't really need.
answer_details: author: money.stackexchange.com/users/965/mpenrow
score: 6
sents: text: If it is one of those debit cards you use just like a credit card without a PIN, I'd cancel it regardless of whatever you are trying to do with your finances.
text: They just seem too dangerous to me.
text: Unlike a credit card, if someone makes fraudulent purchases on a debit card the money is gone from your bank account until you resolve the issue with the issue.
text: With a credit card, the BANK is out the money until it gets worked out.
text: My brother once had
text: his credit card number (not the card) stolen and the criminals emptied his bank account.
text: Eventually the bank put the money back after an investigation, but it had two really nasty side effects: 1)
text: Dozens of checks bounced.
text: The bank refunded the bounced check fees, but not all of the stores would.
text: 2) He had no money in his account until it was resolved.
text: Luckily in his case they resolved it in a few days, but he was already making preparations to borrow money to pay his rent/bills.
answer_details: author: money.stackexchange.com/users/149/JohnFx
score: 5
sents: text: How about just stop buying stuff?
answer_details: author: money.stackexchange.com/users/1548/DexterW
score: 4
sents: text: Using cash instead of a debit card lets you see in real time how much cash you have left and where it's going.
text: It's a lot "harder" to see the cash disappear from your wallet than it is to swipe the plastic
text: (whether it's a debit or credit card).
text: Using cash is a way to keep the funds in check and to keep spending within a budget (i.e. you can't spend it if you don't physically have the cash anymore).
answer_details: author: money.stackexchange.com/users/1542/Justin Scott
score: 3
sents: text: Debit cards are the dumbest development ever.
text: I now have a piece of plastic that allows any yahoo to cause me to bounce my mortgage.
text: Great.
text: Throw away the debit card.
text: Use a credit card and exercise some self control.
text: Take out a sufficient amount of cash to cover your weekly incidental expenses under $50.
text: If you want something that costs more than $50, wait a week and use the credit card.
text: You'll find that using cash at places like the convenience store or gas station will cause you to not spend $3 for a slim jim, lotto ticket, donut or other dumb and unnecessary item.
answer_details: author: money.stackexchange.com/users/1288/duffbeer703
score: 3

Summary of the answers:
If you think it will make it harder for you to make impulse purchases, then you should throw away the debit card.
The answer will depend on the type of debit card that you have but you might want to consider getting of rid of your card.