Pros and cons of debit cards for sending money
Debit cards are similar to credit cards but are linked to your checking or bank account. When you make a purchase or complete a transaction using your debit card, the money is immediately deducted from your bank account. A credit card allows you to borrow money up to a certain limit on your card, which then needs to be re-paid before a certain time or interest is added to the amount you have spent.
There are several positives and negatives attached to using a debit card for sending money overseas; each will play a factor in whether a debit card is the best way to send money internationally for your needs:
- International transfers cost less than they do with credit cards
- There are no annual fees
- They are useful for emergency transfers direct from a bank account
- You could be eligible for rewards when using a debit card with your bank
- They are a widely accepted payment method and often offer an instant transfer
- You are not borrowing money so don't risk having to pay interest on transactions
- Debit cards tend to have higher international transfer fees than other options
- You are limited to bank and checking accounts
- Funds are taken immediately out of your account - credit cards give you a little more time to pay back what you've borrowed
How to transfer money using your debit card
There are several traditional methods you can use to transfer money internationally with your debit card. For all of these, the important pieces of information you will need are:
The permanent account number: the 16-digit number which appears on the front of your card
The card's expiry date
The security number: the last three digits printed on the signature strip on the back of the card
Occasionally you will also need to provide the bank account number and sort code that corresponds to your bank account: these are usually printed on the front of the card. In some cases, your money transfer provider may also ask for your IBAN (International Bank Account Number) and BIC (Bank Identifier Code). You will normally be able to find both of these numbers by logging in to your online banking and viewing your account details.
When using your debit card to send money, you'll need to enter these details along with the amount you want to send, where you want to send it and what currency you want it to be delivered in. After you hit pay, you could be re-directed to your bank's security page to verify your payment; this is a typical security measure.
Using your debit card to send money abroad
The main advantage of using your debit card to send money internationally is that it gives you options that relate direct to your bank account at the time you send.
Most major money transfer providers support debit card payments, including WorldRemit who are well-known for their commitment to low fees, simple transfers and near-instant transfer times. If you're looking to send money to debit card instantly, they are a great option.
How to receive money using a debit card instantly
If you want to receive money directly to your bank account or instant transfer - with immediate access via your debit card - all you need to do is give the sender your account details. These usually include:
Your name as it appears on your card
Your account number
Your sort code
When sending funds, the payee simply enters your account information, and the money will be transferred directly to you, allowing you to use your debit card to spend the money the instant it is cleared in your account. This makes debit card transfers by far one of the most convenient ways to send and receive money, one of the biggest reasons for their popularity.
If you are using your bank to send or receive money, it's important to do the relevant research on fees you and the recipient/sender are likely to incur. Banks will often charge much higher fees than money transfer providers, so comparing these is a good idea if you are set on sending or receiving money via your debit card.
Can you send money to a debit card instantly?
While debit cards can be fast and convenient, the time it takes to send money abroad depends on several factors. Paying for your transfer with a debit card is certainly faster than paying via check, cash or bank draft. Most card transactions are processed instantly, but it might take up to 24 hours for the money to move out of your bank account.
However, there are other factors that determine how fast your money transfer is processed. Common factors to consider include:
Location: How fast you can send your money depends on the countries you are sending between. Transferring to popular destinations such as the UK and USA is much quicker than places like Kenya and India, where money transfers may be less common
Your transfer provider: Transfer speed also depends on the service you are using. It is a good idea to compare transfer times between service providers and choose the one that fits your needs: for example, you may find that one provider specialises in your chosen money transfer route more than its competitors. Remember, some of the faster transfer options may cost more, so weigh up cost vs. time when comparing your options. We've put together a list of top 10 money transfer companies to get you started
The withdrawal method: Finally, transfer speeds may also depend on how your recipient wants to receive the money. If you're using your debit card to send money to another bank account, it might be slower than bypassing banks and sending it directly to them with the help of a money transfer service
Can you send large amounts with a debit card?
Money transfer providers will have high transfer limits than banks, so this is definitely worth bearing in mind if you are looking to send large sums internationally.
When you send money using a debit card, the money comes directly out of your bank account, and, in theory, you could send the total available amount in your account. However, most debit cards have a daily spending limit which is the maximum amount of money you can send or withdraw in 24 hours. The amount varies differs bank to bank and depends on the type of checking account you have.
Some debit cards will have a daily spending limit capped at $1,000, $2,000, or even as much as $5,000, but most will have an international transfer limit lower than this amount. Therefore, if your daily spending limit is $5,000, you might have a daily transfer limit of $1,000.You can find out what your spending limit is by checking on your bank's website, reviewing the paperwork issued with your card or calling your bank branch.
If you're looking to make a significant transfer with your debit card, you can also request to increase your spending limit temporarily. This may, however, take time and incur additional fees.For this reason, a money transfer service can be more convenient as most have much higher transfer limits. Most providers allow you to send up to $15,000 per day with bank transfers or $2,000 per day if you choose to fund the transfer with your debit card.
Sending larger sums
If you are looking to move a large sum of money internationally, paying by debit card may not always be your best option. A specialist provider such as XE is better equipped to help you send larger amounts of money abroad safely, with less of a fee, but will recommend you use a bank transfer rather than a card payment.
This is definitely something to consider when you are looking to move a large sum of money beyond borders.
How much does it cost to send money internationally using a debit card?
International transfers using a debit card typically have more costs attached than other means of payment but will still cost less than using a credit card.
Charges might include online transfer fees (charged by your bank or money transfer provider), an exchange rate margin, and possibly taxes. It's hard to give accurate estimates of how much these will amount to because the fees and margins vary greatly between individual providers. Our comparison tool presents precise comparisons between providers in real-time for anyone transferring funds using a debit card.
When you send money abroad using a debit card, the cost also depends on which country you are sending it to. Transfer routes between popular countries and business destinations may cost less than transferring money to a remote corner of the globe.
If you regularly make international purchases, it might be worth applying for a debit card that doesn’t charge foreign transaction fees; there are several options in Australia from the Macquarie Transaction account to the Ubank Spend Account. However, many of these options will still charge a monthly account fee. Although with Australian banks typically charging 3.5% on all overseas transactions, the monthly account fee often still saves money.
Unless it is an emergency, it is always a good idea to do your homework in advance.
Research your options and compare the costs between different banks and service providers. One of the best ways to do this before you have to make the transfer, giving you ample time to cross-compare and find out where you're getting the best rates. We've put together a list of key points to consider to help you find the cheapest way to send money abroad.
Remember, you should do your research every time you're planning to send money abroad. Just because one provider was the cheapest option last time, doesn't mean this will still be the case.
Summary: Is sending money with a debit card the best option?
Unlike credit cards, the money you spend or send using a debit card is deducted directly from your bank account. While most banks do not charge any annual or service charges for debit cards, international transfers can have a lot of associated costs, such as online fees and exchange rate margins. Most debit cards also have a daily spending and international transfer limit, which makes them less than ideal for large transactions. Debit card spending maximums are set by your bank or debit card provider, which can vary greatly. Some debit cards may have a daily transfer limit as low as $1,000 per day.
Fortunately, digital money transfer services make international transfers much more simple and a lot cheaper than traditional methods. These online providers specialise in facilitating international transfers and can often offer you a better deal than your bank when using your debit card to make a transaction. It takes minutes to register on their sites, and many offer mobile apps too. These specialist companies offer much more value, including free international transfers, cheaper currency exchange, large transfer limits and real-time alerts.
When it comes to finding the best deal, our simple and easy-to-use comparison tool will help you find your best option in seconds, from established banks to new and innovative digital brands.
