By Miriam Caldwell and michael J. Boyle | The Balance
A debit card allows users to make payments directly from their bank accounts using credit card networks instead of paper checks.
Your bank may issue you a debit card or credit card, but these plastic payment options don't function the same way. Crucially, a debit card is a type of bank card that is linked to your checking account.
Understanding what a debit card affords in terms of convenience and how it works can help you choose the correct card for your needs and use it responsibly.
A debit card is like an ATM card with the functionality of a credit card. The notable difference is that when you buy something with a debit card, the money comes directly from your checking account.
One of the benefits of a debit card is being able to use it for transactions that typically require credit cards. Examples include online purchases, car rentals, and hotel and airline reservations, among other things.
You can use a debit card to withdraw cash at ATMs or make purchases at the brick-and-mortar and online stores where credit cards are accepted, all without having to write a check or carry cash. The biggest advantage over credit cards is that you're not borrowing money as you are when you use a credit card, which can help keep you out of debt.
If you use your debit card at a hotel or for a car rental, the company may put a larger hold on the account to cover the estimated cost of the stay and incidental, or extra, costs you might accrue. Keep more than the amount of your purchase in your checking account if you plan to use your debit card to pay for a hotel or a car rental to avoid a situation in which your card is declined because of a hold in excess of your current balance.
To use your debit card, swipe the card in a merchant's card reader and enter the personal identification number (PIN) that you received from the bank on the keypad. If the transaction is approved, a pre-authorization hold will be placed on your checking account that reduces your account balance by the amount of the transaction. Your bank may show the transaction as "pending" until the money is transferred from your account to the merchant. At this point, it will show up as a cleared transaction.
You may have a transaction listed as pending for three to four days, but hold periods can vary by bank.
It's possible to overdraw your account if you opt for something called overdraft protection. Doing so will incur an overdraft fee, typically of around $35. What this means is that you can successfully make a purchase even if you do not have the funds in your account to cover the expense. The overdraft fee is what the bank charges for allowing your balance to drop to less than zero.
Maintaining a running balance on your checking account can help reduce the likelihood of incurring overdraft charges. You can easily track your debit purchases throughout the month on paper or with a mobile app.
Opting out of overdraft protection means your card will be declined if you attempt to make a purchase when you do not have sufficient funds. In that case, you will not have to pay an overdraft fee.4
Paying with cash or writing checks may be preferable for some people, and checks are drawing money from the same checking account as a debit card.
When you need to pay with plastic, there are benefits to using a credit card instead of a debit card. If used responsibly and if you pay off balances every month, it can help build credit.5
Fraud protection for credit cards also is typically stronger than it is for debit cards. If your card is physically stolen, call the bank immediately. Whether you have a debit card or a credit card, you can't be held liable for any unauthorized charges that hit your account after you contact your bank. Beyond that, protections favor credit cards. The most you are liable for with a credit card is $50, but for debit cards, that liability can increase to as much as $500 if it takes more than two days before you are able to report the fraud. Your liability with credit cards is $0 if only the numbers were stolen and you still have the card.6
Additionally, a stolen debit card often is more inconvenient even if you are not liable for the charges. Money is debited directly from your checking account, and it takes time before it is refunded. With a credit card, however, you don't lose access to any of your own cash—only the use of your card until you are issued a new one.
Debit Card
Spending does not build debt.
It can be used where credit cards are necessary even if you don't qualify for one.
Fraud liability is limited to $50 if reported within two days.
Credit Card
A credit line helps with unexpected expenses.
Responsible use can help improve credit scores.
A cardholder is not responsible for fraudulent purchases if only the numbers (and not the card) were stolen.
BY MADELEINE BURRY | The Balance
Does the idea of networking sound forced and unnatural? Maybe you're thinking of it all wrong: Networking doesn't have to be a transactional, tit-for-tat experience where you connect with people you wouldn’t otherwise associate with for the sake of furthering your career.
Instead, think of networking as being the process of forming a friendship where the major basis for your relationship is work-related (instead of a shared personal interest in movies or love of cocktails). As with any relationship, your network should consist of people you like and admire; after all, who would want to do a favor for anyone who isn't a trusted connection?
As with many things, networking may be different for millennials than it was for previous generations.
For one thing, they have the advantage of a vast number of social networking sites that can be used for networking available.
But more than that, millennials don't tend to network in structured events, but in a more organic way, with lunches and Slack conversations with co-workers, or as an extension of social activities. Here are six strategies millennials can use to develop and maintain their network:
Gone are the days of the all-important golf appointment and formal drinks gatherings structured around a professional affiliation. Attending more formal networking events isn't a bad thing (in fact, it can be hugely helpful)—but it's by no means the only place where you can network.
Once you think of it more as "forming connections" rather than networking, it's easy to see that countless opportunities to build your network are available—you can talk about work and your career-related goals during your kids' play dates, at the pick-up line for school, at church, during parties, when you're at a book reading or other cultural event, and during any kind of get-together.
When it comes to building a community, it helps to be social and a bit extroverted. (But if big groups and socializing aren't your speed, try these networking tips for introverts.) The more people you know, the more likely you are to forge a connection with someone who might know of a job or a good person for you to meet.
Look for opportunities to broaden your network—this can be as small as chitchatting on the elevator, introducing yourself to a speaker at a conference, or saying hello to that person you see every Saturday at yoga class.
There is no shortage of online social sites: LinkedIn, Facebook, Twitter, Snapchat—the list goes on and on. Check out virtual networking programs and events as well. Don't be shy about connecting with people you've met in person on these social networks.
Doing this will help you stay top of mind, far more than business cards or emails, which can easily get filed away and forgotten.
Your tweets, LinkedIn posts, and other social media activity can make your relationship with connections feel closer and more intimate.
Use your best judgment about where to connect socially—if you met at a networking-oriented event, LinkedIn and Twitter are good platforms to connect on. A more casual, drinks-oriented event might make the more friend-oriented platforms (Facebook, Instagram) feel more appropriate. When in doubt, you can ask either in person or over email if they'd like to connect on social media. One cautionary note: Avoid connecting on every social site at once. That could feel overwhelming.
While it's good to know a lot of people, it's also good to build deep, long-term relationships. A mentor can be a touchstone throughout your career, helping you to evaluate job offers, know when it's the right time to leave a job, negotiate a raise, and generally help you with all sorts of career-related conundrums.
Most likely, you won't be at your current job forever—and neither will your co-workers! Build strong relationships with colleagues; if you're lucky, you'll discover that you have a lot more than where you work in common.
These relationships will make your time at work more pleasant, and may also lead to future job-related opportunities in the future, too. So make an effort to go to lunches, happy hours, and show up for birthday celebrations.
The old view of networking was that relationships were of a "you scratch my back, and I'll scratch yours" variety. That seems old-fashioned now; networking doesn't have to be so tit-for-tat.
Still, if you see an opportunity to recommend someone in your network for a job, informational interview, and other career-related opportunities, definitely do so.
And don't forget, if you make a connection that results in a job offer, you'll likely have two grateful connections: Both the person you referred for a job and the person who hired that candidate will be grateful.
BY ALISON DOYLE, The Balance Careers
For most of us, job searching is never easy, whether it’s your first or fifth time looking for a new job. If you feel overwhelmed or don’t know where to start — don’t worry. Job searching is both an art and a science, one that requires time, planning, preparation, and a lot of brain power.
The truth is, job searching can be an exhausting, and daunting experience. However, if you approach it systematically, the process will be significantly more manageable, and you will have much more success in getting the offer you deserve.
Follow these steps for a crash course in how to find a job.
When it comes to finding a job, everyone starts somewhere, whether you’ve just finished school, you’re planning to resign for a better opportunity or career change, you’ve been fired, or you’ve been laid off. Regardless of your circumstances, plan your approach and take care to address any potential obstacles up front.
Unless you have the financial means to do so, do not resign until you have secured a new position (and prepared an appropriate explanation for your resignation, as you will likely be asked during interviews). In addition, you’ll want to make sure to coordinate the timing of your resignation and the start date of a new job.
If you have been fired or laid off, avoid connecting the company that let you go with any potential employers, unless you’re sure your manager will provide a glowing reference. This would likely only apply if you have been laid-off due to budget cuts or company restructuring.
Even in this early stage, start crafting your answer to one of the most challenging interview questions: Why were you fired?
No matter why you’re moving on, get your story straight now and learn it by heart. Narrate your background in a way that’s compelling and convincing, so you are ready to explain your reasons for finding a new job, how it relates to your professional goals, and why you are the best fit for any given position.
Before you start looking for a job, you have to figure out what position you want. Have a specific job title in mind, and then do some research to determine the keywords you’ll use when you start looking for jobs.
When you start job searching, the job description, responsibilities, and requirements will tell you more than the title alone, as titles and roles tend to vary between companies. It can also be a helpful exercise to write a sample job description outlining your ideal position.
Although it’s acceptable to apply to several “reach” positions, don’t waste your time searching for or applying to jobs that you are clearly unqualified for. Figure out in advance how you’re going to decide which jobs to apply to, then actively keep these parameters in mind when you’re job hunting.
Define your priorities before you begin your job search. First, make a list of the “must-haves,” such as the location of the company and your commute time, a desired salary range and benefits selection, and any other factors that are “non-negotiable” to you.
Then, make a list of the “nice-to-haves.” For example, are you looking for a specific type of company culture? Would you prefer to work at an established corporation, or at a start-up or small business?
Do you want to work on a small or large team?
Asking yourself these types of questions (and writing down your answers) before you start to look for a job will help you make a clear and confident decision once you have a job offer.
It’s more important than ever to brush up on your social media do’s and don’ts when it comes to job searching. Prospective employers may be Googling your name and looking you up on Facebook, Instagram, Twitter, and Snapchat.
It is generally advisable to keep all social media profiles as private as possible while you are job searching. The one exception, however, is LinkedIn. Your LinkedIn profile should include a professional head shot and be up-to-date with your most recent experience and qualifications. Take the time to write an engaging summary that will catch the attention of hiring managers.
You should have a “master” version of your resume finalized, formatted, and proofread before you start job searching.
You will be able to tweak it as you job search to highlight and emphasize different experiences or qualifications based on the specifics of the different positions you are applying for.
Hint: Refer to these top resume examples as a starting point to write or refresh your resume.
Although a cover letter is harder to prepare, as it should be personalized for each and every job you apply to, review what to include in a cover letter and figure out what you can write in advance, and what you will need to customize once you start applying to jobs.
Most jobs you apply for will require you to provide three to four professional references who can testify to your qualifications. You don’t want to have to scramble to reach these people, or worse, have an interviewer catch them by surprise. Instead, contact them in advance and let them know that you would like to use them as a reference.
Networking can be a truly powerful way to land a job if done correctly.
Your “network” can include former colleagues, managers, clients, alumni from your alma mater, friends, or friends of friends, family members, neighbors, or anyone from a “community” you belong to.
Although real-life connections are key, browse your Facebook friends and LinkedIn contacts to see if you can find anyone working in your industry or at a company you’d be interested in working for.
If you feel like you’ve exhausted your network, take some time to expand it. Because you are more likely to be hired if you have a connection within the company you’re applying to, dedicating an hour or two to expanding it can be much more valuable than using that time to apply to random jobs.
You can expand your network both online by adding friends and connections, and offline by attending industry events such as conferences or trade shows, or going to career networking events.
So you’ve outlined the position you want, and the key search words you’ll use to find it. You scrubbed your online presence. Your references are lined up and expecting to hear from employers. Your resume is ready, and you’ve written some material to integrate into the cover letter you’ll customize once you find some potential job options. Now, it’s time to find and apply to those jobs.
There are many places to search for jobs. Sites like Monster.com, Indeed.com, Dice.com, and CareerBuilder.com are among the best and most utilized job sites. LinkedIn can also be a great place to search for jobs, and can show you if you have any connections at companies that are hiring.
Craigslist is a solid option as well, especially if you’re located in an urban location, though search under “Jobs” and not “Gigs” unless you’re looking for short-term or temporary work. If you live in a smaller or more rural town, it’s likely your local newspaper will also list job opportunities in the surrounding community.
In addition, niche sites that list specific types of jobs are another great resource. There are many types of industry-specific job sites out there; simply Google “[your industry] job listings” to get started.
Finally, if you know you want to work for a certain company, look for job openings directly on their website. You may have to do some digging, but most companies list jobs on a “Careers” or “Opportunities” page that you can find on the footer of the website.
Keep in mind that the vast majority of job applications these days are online applications, so you will need to submit a digital version of your cover letter and resume. Be sure to use a working (and professional) email address for all correspondence related to your job search.
Job searching is a tiring process, and it’s easy to burn-out. Set reasonable, achievable goals for yourself. For example, you might aim to apply to ten jobs per week. Then, be sure to set aside time to complete these goals. You might have to make some sacrifices, such as getting up an extra hour early, or using your lunch break to look for jobs.
Organize your job search progress and note which jobs you applied to, and when, so you can follow up accordingly.
Hint: Use these six simple tips to maximize your job search productivity.
The next step in landing a job is acing your interview. You may have several rounds of interviews, usually starting with a phone interview, then followed by in-person interviews. You should never risk an interview by “just winging it.” Take your interview preparation seriously, and be sure to:
Carefully read the job description, focusing on the responsibilities and requirements. Be prepared to explain, with tangible examples, how you fit the requirements and how you can fulfill the responsibilities.
Research the company, including their mission statement and any recent or notable achievements, or changes in strategy or positioning.
Practice answering interview questions specific to your desired position and industry.
For a phone interview, set aside at least 45 minutes of quiet, uninterrupted time. Have your resume and cover letter printed or open on your computer for reference. Be sure to take the call somewhere with excellent cell service. If you have one, a landline is preferable for optimal audio quality.
For an in-person interview, arrive 10 minutes early with a printed cover letter and resume. Be sure to dress to impress, and express polite and professional enthusiasm about the position and the company.
Be sure to take the time to follow-up after the interview with a thank you note or email message reiterating your interest in the job and the company.
With job offers in hand, it is now time to evaluate your options. Look back to your original “must-have” and “nice-to-have” list and see where the offers fit. Be sure to consider practical factors, such as the salary, benefits, vacation time, corporate culture, your commute, and the attitude and personalities of the people you would be working with.
If you’re stuck, make a list of pros and cons — and be sure to listen to your gut in order to choose the best job for you.
BY ANNA BALUCH | The Balance
It’s important to treat yourself from time to time for your own mental health and happiness. Not budgeting for indulgences, however, can take a toll on your financial situation if you’re not careful. Luckily, there are ways to treat yourself and keep your finances in check even if you’re on a tight budget.
“When you treat yourself, you do something that time and money doesn’t permit on a regular basis,” Paul Gaudio, certified financial planner (CFP) at Bryn Mawr Trust, told The Balance via email. It’s an activity or purchase you enjoy every once in a while, rather than every day.
It can mean a variety of things, many of which don’t cost any money at all.
“For example, you can turn off your phone, read, write, or simply relax on the couch,” Mike Kayes, certified financial advisor (CFA) at Willingdon Wealth Management, told The Balance via email. “Given that many days can be busy and stressful, you may find quiet time to be a refreshing treat.”
While it may be OK for your friend to indulge whenever they want, it may make more sense for you to do so weekly or monthly.
There is no one-size-fits-all answer to how often it’s OK to indulge as it all depends on the price tag of your “treats,” your income, your budget, and your long-term financial goals.
“For me to feel at ease indulging, I have to sacrifice first,” Kayes said. “As a decathlete, I monitor my diet very closely, but I also love ice cream. So, I eat ice cream once a week to ‘indulge’ when I’d prefer to consume it every day.”
Kayes strongly believes that, while indulgences don’t have to cost a lot, they should involve sacrifice first. Setting aside funds for a more costly indulgence like a weekend getaway or a fancy meal outfits a sacrifice such as working overtime, picking up a side gig, or paying off a debt first. The more you sacrifice, the bigger and more frequent your indulgences may be.
To budget for your indulgences, set and prioritize financial goals first, such as paying down high-interest credit card debt and student loans, or simply paying all of your monthly bills before spending any other money. Understand where you currently are and where you hope to be in the future so you can determine the ideal budget for your situation.
“Once you look at your income and expenses, you'll uncover how much you can allocate toward indulgences while still staying on target to reach your goals,” David Abate, CFP at Strategic Wealth Partners, told The Balance in an email. Abate suggested a few budgeting methods, including:
Pay yourself first: Calculate the monthly savings you need to reach your financial goals. Next, pay yourself first by automatically depositing that amount in a bank account directly from your paycheck. After you account for fixed costs like housing and transportation, you can use the remaining dollars toward your highest priority discretionary expenses. This method can ensure your habits properly align with your goals.
Envelope method: Placing money into envelopes with different categories like groceries, gas, and indulgences is a great idea. Then, only spend the money you have in that envelope for that category every month. The envelope method can give you a sense of empowerment and allow you to allocate your funds based on your priorities.
Another budgeting method that may be right for you is the 50/20/30 budget, which can help you allocate your monthly take-home pay toward necessities, savings, and your wants (indulgences).
There are a variety of ways you can treat yourself on a tight budget. Abate recommended that you get creative and think about lower-cost alternatives that don’t make you feel like you’re sacrificing too much.
Organize a book club: Instead of spending a lot of money on social activities with loved ones, start a book club where members can meet in-person or virtually to discuss a book and enjoy their favorite food and drinks together.
Visit a park: There are many town, county, and national parks throughout the U.S., most of which allow free entry. Visit a local one every so often to get some fresh air and immerse yourself in beautiful views.
Volunteer: Meet new people and give back to your community through volunteer activities. You can volunteer at an animal shelter, soup kitchen, or local nonprofit organization.
Relax in a hot bath: After a long, hard day, take a hot bath and listen to your favorite music. This way you can unwind and relax in the comfort of your own home without spending a dime.
Buy a quality coffee machine: If you’re tempted to go through the Starbucks drive-thru every day for a latte, invest in a quality coffee machine instead and prepare drinks at home.
Remember that it’s OK to indulge. In fact, doing so can keep you sane and happy without compromising your finances. Just make sure you budget accordingly for your indulgences. If there is no room in your budget for indulgence, alter it so that you’re not spending as much on other expenses.