We’ve been planning a trip back to the States for this summer, looking forward to spending time with family and friends we only get to see once every few years. Of course, the reason we so seldom get to visit is the huge expense of international airfare for four. For us, it’s big money, and because we don’t own a credit card it’s something we have to pay in one lump sum.
So we finally bought our tickets, and all was well until one day I tried to buy groceries and my debit card was refused. What?!? I knew we had enough money in the account, but for some reason the card was declined. I called my husband, a bit panicked, only to be told that we must have hit our limit. Our limit? We have a limit? And then I remembered that this had happened once before, when we first moved to France and spent a lot of money in a short period of time buying furniture for our new apartment.
In France, debit accounts are subject to a plafond-a “ceiling”-which means you can only spend a certain amount of money (using your card) within a certain amount of time. It has nothing to do with how much money you actually have in the account. Does such a thing exist in the U.S., where consumers are encouraged to spend beyond their means? I can’t imagine it.
The whole situation was a big frustration for me, because I use my debit card for everything and hate having to get cash out. But it also leaves me wondering if I’m more or less frugal using only cash? I certainly don’t buy things as readily as I would with my card, since I’m counting every penny.
What about you? Have you ever had the experience of “hitting your limit”? Do you find that debit cards make buying what you want, when you want it just a little too easy?
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{ 22 comments }
That’s so weird. I mean, a debit card accesses YOUR money, not the bank’s money. If the money’s there, why is there a limit on how much you can take of YOUR money?
I’ve never run into a limit when using the card at a business, but since I haven’t made any big purchases on it, I can’t be sure if there is a cap or not. I know there is a cap on how much I can get out of any ATM per day.
I actually am less likely to spend with my debit card. I think because it’s a card, I associate it with a credit card, which I try not to use at all. If I have cash, it just runs through my hands like water. It’s better for me to use plastic.
.-= Annie Jones´s last blog ..An Award =-.
According to financial guru Dave Ramsey, debit cards can cause you to over-spend.
“There’s something psychological about spending cash that hurts more than swiping a piece of plastic.” (Holding the bills in your hand, counting them and then handing them to someone else . . .) If spending cash whenever possible can become a habit, you’ll be less likely to over-spend or buy on impulse.
I think there’s a lot of truth to this–and have begun to use cash whenever possible.
If this works for you, that's great. I know that when I have cash I spend it a lot more than if I have to use my debit card.
I’m with Kelly. I try not to take out cash because then I make little purchases — a hot chocolate at the cafe, a snack on the way home from the park for my daughter and me (even if we have food at home), etc. When I don’t have cash I restrict myself to bigger and necessary purchases. I never buy big things on a whim, but I’ll sure buy that extra chocolate if I have the coins on me!
From what I understood after talking it over with my husband, it’s a safety measure. The bank is afraid that if you’re spending that much at once, it might mean someone has stolen your card, so they put a block on it. The problem is that you can’t just call the bank and get them to “unblock” it–you have to wait until their time period is up to use the card again. It makes me wonder if there might be a way around it if I called the bank ahead of time…
You can call ahead of time, as my inlaws did the last time we bought our tickets to the States, or you can also call after it's been blocked, to ask them to unblock it. Usually there's a temporary waiting period, but not too long.
That sounds frustrating.
I asked my bank once what the limits on our debit card was and they told me I could withdraw $300 in a day and make $1,000 in purchases in a day.
That is so funny, because the same thing happened to me just yesterday! We also do not have a credit card, and we have finally saved enough for new furniture. I ordered it online, and then went to the grocery store. My debit card was also refused, and I felt the same as you – I KNEW that we had money in our account, so it really didn’t make any sense. I called my bank, and they told me that they have a limit on what you spend with your debit card and we had surpassed it by 49.00 due to the furniture purchase! So, I had to go to the bank, get cash, and go back to re-buy my groceries. Thankfully, the store had set my cart aside so I didn’t have to re-shop as well!
Oh, and I live in Montana, so I guess it happens in the US as well!
There are limits on debit cards in the U.S. It varies from bank to bank. My personal bank has a daily limit of $1200, which I discovered when trying to pay a lump sum to my gym. The good news is that if you call your bank while trying to make the purchase, they will raise your limit on the spot (I guess it depends on the bank, because big banks probably have more red tape).
Ah the limit–and it is a safety measure to keep someone who has stolen your card from spending everything. It *seems* to me that the your liability is greater here in France if your card is stolen so this is a good step probably.
FYI, did you know there is also a cash out limit too? It’s not very high–I discovered this once when I forgot my checkbook and needed to pay some movers–luckily they were able to take a debit payment in the end.
I will keep your experience in mind. I’ve been very, very tempted to just get rid of the last US credit card we keep . . .but I would get a little worried about running up on the limit. I wonder if there’s a way to notify your bank to get a ‘pass’ occasionally. . .
.-= Simple in France´s last blog ..Personal Update: Are we finally going to settle down!?! =-.
Two of the four big banks here in South Africa have a monthly limit on total money leaving your account. My husband actually moved banks to escape this problem as our bond, car and general monthly living expenses were barely under this amount, which made even moving money into our saving account a pain! While I can see why banks would feel entitled to do this, I wish it was a choice given to customers when opening the account or at least a choice of the amount of the limit. For safety reasons, we almost never use cash, only debit cards combined with the notebook system to track spending.
That does sound strange to me. I prefer to use my credit card because I get 5% cash back on food & gas and 1% cash back on everything else. We pay it off every month so interest rate doesn’t affect us. Having that several hundred dollars cash-back credited towards our March statement once a year is really nice!
.-= Random Thoughts of a Jersey Mom´s last blog ..Spending Hard-Earned Money =-.
In Canada there is a limit, but you can get your bank to adjust it. I found out the hard way when I went to pay for my laptop. Now that I know there is a limit, I am prepared and I like the added security.
I do not have a limit on the amount I can spend on my debit card. In fact the bank would love for me to overspend it as they can collect $31 a transaction on an overdrawn account.
Recently, I opened a new checking account at the same bank. It came with a $2000 overdraw reserve amount. I have to take it for at least the first 6 months although I do NOT want it. It has something to to with some of the new banking regulations to take effect in June. I can hardly wait to drop it. I do not know what this reserve would cost me. If i was not keeping track of my money I could overspend my account by $2000 before being notified!
Do check your online banking balances frequently.
I feel your pain.. I have immediate family and many old friends living in Ireland, but the airfare is just too expensive to go as often as I would like. Especially in the summer time, and the winters in Dublin aren't too friendly.
A similar thing happened to us when trying to buy our tickets to NZ with our debit card. We had a $1500 limit or something close to that. I called the bank and I had to get approved for a "Platinum" Account meaning there was an average balance of some ridiculous amount. Luckily, they expedited the approval and I could keep the card, I needed to buy the tickets within three days to get special rate savings us over $1200. What a hassle and a half. Feel your pain. Hope that is the only hard part of the whole trip 🙂
.-= Keilah´s last blog ..Deal of the Century! =-.
As others already mentioned, it happens in the US too. It happened to me when I tried to pay $1600 tuition with the debit card and was declined.
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I absolutely love debit cards! I use them for everything and never want to use a credit card ever again.
The reality is that if I don't have the money, I shouldn't be spending it. Also, there was a time period when credit cards didn't exist.
I'm with you- I would never go abck to having a credit card. Not when I can use my debit card in the exact same way as a credit card, but have it be all my money!
It has happened to me… My bank called it a floor limit. It is there to protect you. If you drop your debit card and don't realize it, it will stop someone from being able to drain your entire account in 1 day.
I was living in Dallas, at the time. My brother in law offered to take my ex-husband and I Christmas shopping (we didn't have a car). After a full day of shopping, we offered to take him to dinner to thank him for driving us around all day. We finished dinner, and our card was declined. He ended up having to pay for all our dinners- We felt SO foolish. The next day, I took the money out of the bank and paid him back for the dinner… but it has always made me think twice about using a debit card to pay for dinner out.
.-= Jolene´s last blog ..Melody, a birth retrospective (finally!) =-.
We have never ran into a limit on the debit card.We have at the ATM.You can only take $300 out a day (yeah,like I would)haha.It helps that I only shop on the weekends.Saves on gas and splurge spending.Always shop with a list BTW 🙂