Here's What Happens When You Have Too Many Debit Cards

Plastic has sure become a popular way to pay. We talk a lot about credit cards here at The Ascent, but debit cards are also a common part of many Americans' wallets. Research from The Ascent found that in 2020, 83.14% of us had a debit card, and those numbers were projected to rise, so it's likely a higher percentage now.

Debit cards and credit cards might look similar, but they are different. A credit card is linked to a line of credit (which isn't your money; it's money you borrow from the card issuer by using the card, and then repay). But a debit card is directly linked to a bank account. This can be a checking account, savings account, or a money market account. So when you use the card to make payments or to withdraw from an ATM, you are directly tapping money you have in the bank.

If you have multiple bank accounts, you might have more than one debit card. This is my situation -- I have two checking accounts with different banks, and as a result, I have two debit cards. But is there a risk in having multiple debit cards?

Greater risk of fraud or money loss

If you have multiple debit cards, you could open yourself to greater risk of losing money through fraud. Credit cards are an extremely safe way to pay for purchases, as opposed to debit cards. Credit cards have more robust protections for fraud -- if someone uses your card without your authorization, the most money you'd be liable for is $50 (and the best credit cards have $0 liability).

With debit (or your bank account in general), your protection decreases the longer you wait to report an incident. Within two days, you're liable for $50. After 60 days, your liability rises to $500, and beyond that, you have no legal protection.

Plus, since debit cards are directly connected to your bank account, the risk to your personal finances is a lot greater than when you use a credit card since the latter is money borrowed from a credit card issuer.

Potentially more fees to pay

A lot of checking accounts have fees, like monthly maintenance fees, ATM fees, overdraft fees, and more. More debit cards means more bank accounts, and a greater likelihood that you're paying fees.

Overdraft fees are actually becoming less common, but when you spend with a debit card, you've got to be careful not to overdraw your account, lest you incur them.

Less ability to build credit and earn rewards

Since using a debit card doesn't involve borrowing money, using one doesn't do anything to improve your credit, like using a credit card responsibly can. However, you may be trying to avoid the temptation to overspend that might come with a credit card.

In that case, a secured credit card (which has a credit limit based on a cash deposit you make when you open the card) might be just the thing for you. You can build your credit and have more guardrails in place than a traditional credit card offers. And credit cards (even some secured ones) offer the chance to earn cash back and other rewards. Most debit cards don't.

More complications to managing your finances

Finally, having multiple debit cards could complicate your finances. Managing multiple bank accounts could end up taking more time and effort. I do have to spend a good chunk of time passing money through my various accounts, but thankfully, my second checking account only has one job: giving me cash and payment access to the linked savings account, as necessary (and it's not necessary very often). I pay no bills out of that account, and in fact, I don't regularly carry either of my debit cards in my wallet.

A few tips for smart and safe debit card usage

Whether you've got one debit card or multiple, here are some pointers for using them safely:

• Don't use debit at gas stations: Gas station card readers have a greater chance of being tampered with, so thieves can steal card information. Plus, buying gas on debit sometimes means having a large hold put on your account for more money than you actually spent.
• Think twice about using debit for online purchases: Again, credit cards are a much better choice for online shopping -- many offer purchase protections, should you encounter a problem with an online order.
• Cover the keypad when entering your PIN: Better safe than sorry. Keep your PIN from prying eyes by shielding it with your hand.
• Stay on top of your bank balance: Today's banking apps are better than ever, so it's easy to check your balance from anywhere. You definitely don't want to overdraft your account.

Debit cards could be a cornerstone of your personal finances, and that's perfectly fine. Just be aware of the potential issues, and always spend safely with your debit card.