Why your Debit Card Limit Matters

You’ve opened your bank account and are handed a debit card along with an account agreement explaining the transaction limits for your card. You study it carefully and commit all the information to memory. Probably not. What amount can you mobile deposit? Will funds be held on your deposit? How much can you e-transfer? Is there a purchase limit at a store? The answer to all of these questions is determined by your debit card limit. If you want to avoid having to go into a bank, a high limit is desirable. Here’s why and how to upgrade your card limit.

What Does your Debit Card Transaction Limit Mean?

Your debit card limit determines the maximum transaction amount for everything you do online, at ATM’s, and debit card purchases. In other words, all your banking transactions that are not done in a branch. The range of limits is significant. You could have 4 day holds on everything you deposit at an ATM or no holds at all. If you prefer the convenience of doing all of your banking online instead of standing in line, a high limit on your debit card is desirable.

Here’s everything your debit card limit determines:

Deposits

How much money you can deposit at an ATM or through mobile cheque deposit each day and how much of that money you will have access to right away. Your debit card limit determines both the hold amount and how long the hold will be on your account. For example, if you deposit a cheque for $3000, you may be given immediate access to $1000 with the remaining $2000 held for 2 days.

Withdrawals

How much money you can withdraw at an ATM within 24 hours.

Payments and E-transfers

This one always causes some confusion. The limit for payments and e-transfers is usually a shared one with a cap on the amount for e-transfer. There are also daily, weekly, and monthly restrictions. E-transfers are usually set at a maximum limit of $3000 daily. Here’s an example of how this works:

Let’s say your daily payment limit is $5000. You send an e-transfer for $2500 to pay your rent on Monday at 10 A.M. Your school tuition is also due so you decide you may as well get that paid up so you sign into your online banking to make a payment of $3200. It will get rejected because you are over your $5000 payment limit. You will need to wait until after 10 AM on Tuesday to make this payment online.

Purchases

How much you can purchase using your debit card each day. Thinking of making a large purchase? You really want to be aware of this one before you go shopping!

You’ve decided it’s time to buy some new furniture. You pick out a lovely sofa set and your partner has decided on a big new TV.  Total cost is $2800. No problem – you have $10,000 in your bank account, right? Sorry, no. If your purchase limit is $2500 you’re not going to be able to pay for this using your debit card.

TIP:  if you know you are going to be making a large purchase with your debit card call your bank in advance and ask for your card limit to be reviewed for an increase or at least temporarily upgraded so that you can make this purchase.

Receiving Money

Did you know you can only receive a limited amount of money by e-transfer? This limit determines how much money people can send you by e-transfer in a day, week, and month.

How is My Debit Card Limit Determined?

A credit check is completed when you open your bank account and your debit card limit is determined by that credit check. Don’t worry – it’s a soft check, which means it doesn’t count as a hit on your credit bureau. Just another reason to have good credit!

What if you want a higher limit? Call the bank’s toll-free number or talk to a customer service representative in person. Front line staff have a limited amount of authority to increase your card so your request may need to be referred to a manager.

Here’s what they will look at for a card limit review.  

  • How long your bank account has been open. This is more important than you think! If you’ve had your account with a bank for 10 years and have operated it satisfactory then you’re more likely to get a card limit increase.
  • How you handle your overall banking. This means whether you make your payments on time or if you have NSF cheques or payments.
  • The overall relationship, which means the number of products and services you have.

I can’t stress enough the importance of building a good relationship with your bank. It doesn’t mean you need to have a lot of money. It’s really just about how you manage your bank account and making your payments on time.  

The bank can also reduce your card limit in the event you don’t handle your banking transactions properly.

How do I Know What My Limits Are?

You can check your limits in the online banking app. Most banks have this in the “other” or “more” tab. If your bank doesn’t have this available online then call or go into a branch and get a printed copy if you want to keep it handy. (Then suggest they upgrade their app!)

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