credit approval for debit card?

Question

Why do they check for credit, if the money is just comming straight out of your bank account?
and do they really set a limit of how much you can spend

Like.. I have well over $300,000 in the bank.. when I go shopping, i go all out and spend like $10,000 just in abercrombie.. I'm a freak I know... but I just can't spend whatever's in my account? Hmm.

Answer 1

Because you are able to spend more than is in your bank account. Think about it, you have $700 in your account, you write a check to someone for $600 then go out and use the debit card for $300. When the check hits the bank your account would be overdrawn, but while the check is still outstanding you could take the funds by debit. That is why the credit check.

My card sets no limit for using it except for cash and ATMs. Other banks have different policies.

Answer 2

It is standard practice for banks to run credit checks for the issuance of a debit card nowadays because the card can be used at any store that accepts credit cards and therefore there is a chance that you will overdraw your account and the bank will, in essence, have to extend a type of "credit" to allow the transaction to go through.

Answer 3

Gem wouldn't your same theory apply to just having a checking account after all you can write 1 check and the go someone else and write another check and over draw the account.

Answer 4

People who really have $300K laying around in the bank, don't bother with debit cards.... or even credit cards for that matter. They have "people" who take care of those things.

Answer 5

just part of the old gray suit practice that has been going for years and will never change -- i sure would not go shopping with you and have to lug all of the purchases around!!!