Transaction accounts and debit cards

A transaction account is an account you use for day-to-day banking such as paying bills and getting your wages.

Transaction accounts are often called ‘everyday accounts’.

When you choose a transaction account, compare the account features and choose a no-fee or low-fee account.

What to look for in a transaction account

Most transaction accounts come with a debit card for withdrawing cash and making purchases.

Low-fee or no-fee

Some transaction accounts charge monthly account-keeping fees and other fees for things like ATM withdrawals and internet banking.

Think about your spending habits and choose the account with the lowest fees. For example, if you often use ATMs, choose an account that has low or no ATM fees.

The best option is a no-fee account.

Basic bank accounts

If you’re on a low income, you may be able to get a ‘basic bank account’ which has:

  • no account-keeping fees

  • free monthly statements

  • no minimum deposit amount

  • no overdraft fee

See Australian Banking Association – Affordable banking for information about eligibility and a list of basic bank accounts.

Debit versus credit cards

When you use a debit card to pay for things, you are spending the money in your account. If there’s no money in the account, you can’t make a purchase.

When you use a credit card, you are borrowing money, which you will have to pay back with interest.

Using a debit card is less risky than using a credit card, because you can’t run up a debt.

Some debit cards are ‘dual network cards’, which means you can also use them as a credit card. If you do use your debit card as a credit card, you can be charged high interest. You might end up paying more than you would on a regular credit card.

If you are switching from a credit card to a debit card to avoid debt, make sure your debit card does not have a credit option.

Contactless payments

Most debit cards have Visa’s payWave or Mastercard’s PayPass as a contactless payment option. This means you don’t have to insert or swipe your card or use your PIN for transactions under $200.

Many accounts also have ‘digital wallet’ options such as Google Pay and Apple Pay. These allow you to pay for things with your smartphone or smartwatch instead of using a card.

Check what your options are when you choose your transaction account.

Overdraft fees

If you withdraw more money than is in your account, it’s called going into overdraft.

If you go into overdraft, you may have to pay hefty fees and interest.

Make sure you regularly check your account balance. Leave enough in your account for any automatic payments that you’ve set up, like direct debits.

From July 2020, if you bank with ANZ, Commonwealth, NAB or Westpac, you’ll be able to share data from savings and transaction accounts and debit and credit cards. Find out more about the Consumer Data Right

Compare transaction accounts

Compare transaction accounts to find the one with the lowest fees and a debit card that suits your needs.

Your current provider’s default transaction account may not be the best option.

Comparison websites can be useful, but they are businesses and may make money through promoted links. They may not cover all your options. See what to keep in mind when using comparison websites.

Compare these features:

Account fee

  • monthly account fee

Account access

  • if there are branches or ATMs where you need them

Contactless payments

  • debit card contactless payment options

Overdraft fees

  • fees if you go into overdraft

International transactions

  • if you can use your account and card overseas

  • any extra fees for overseas and international transactions

Branch fees

  • fees for making deposits or withdrawals at a branch

Cheque fees

  • fees for depositing or withdrawing cheques

Review regularly for better features

Banks often offer new accounts with competitive features. Compare the fees and features and consider switching bank accounts if you find one that suits you better. 

Reproduced with the permission of ASIC’s MoneySmart Team. This article was originally published at

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