Debit Card Charges
If you use your debit card sensibly and follow certain guidelines, it is free to use; you are able to benefit from instant, worldwide access to money in your current account, and not pay a penny in charges. However, there are certain specialist services that will almost certainly incur a penalty charge: many of these can be avoided. If you are likely to use a number of services that incur charges, you should shop around to find the best deal. You will find that some debit cards are subject to larger fees than others.
Overdraft Charges
If your current account offers an overdraft facility, there will, in most cases, be a charge for using it. This charge varies between institutions, but in most cases, there are interest charges plus a flat-rate fee for each day you are overdrawn.If you had not previously arranged an overdraft facility with your bank or building society charges will be higher; unarranged overdrafts carry higher interest charges and fees than arranged overdrafts.
Account Maintenance Fee
There are numerous different charges which could apply if you attempt to make a transaction and do not have the required funds to cover it. This charge is often called an account maintenance fee because the refused transaction will result in administration for your bank or building society. If you use a cheque guarantee card, which obliges your bank to authorise the transaction, or if they decide to authorise they payment despite your lack of funds, there will be a charge. This charge may occur each time a transaction is made that is not covered by your account balance. In some cases, this fee may be up to thirty-eight pounds per transaction. Similarly, if your bank or building society decide to reject the transaction, but a retailer approves the transaction and your bank cannot honour it, you may also be charged.
Cash Withdrawals
Statistics suggest that almost all cash withdrawals in the UK are free of charge, because UK banks and building societies do not usually charge their debit card holders a fee for using their or other institutions' cash machines. However, there are certain ATMs which will charge you if you make a withdrawal. These are generally cash machines in locations that are very convenient for cardholders, such as bars and clubs. UK regulations state that if the machine charges for a withdrawal, it must clearly state this before you make the transaction, so that you can make a decision on whether or not to proceed.
Debit Card Surcharge
Your bank or building society will not charge you for using your debit card for purchases. However, there are certain stores and online retailers that may apply a surcharge if you pay by debit card; for example, train tickets purchased by debit card are often subject to a fee. This is often a small flat-rate fee, but could be a percentage of the transaction amount, which might increase the cost of your purchase by a considerable amount.
For details of charges when using your debit card abroad, see:
