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More People Are Switching to Debit Cards |
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by: Debbie Dragon
Today, many people are switching from paying with cash or paying with a credit card to paying with a debit card. Having to carry a lot of cash around can be a pain and risky. Using a credit card can put you into unwanted debt. Most debit cards now carry a credit card logo, allowing you to use them just about anywhere you shop. Let’s take a look at why so many people are switching to debit cards for their everyday purchases.
While using a debit card is essentially the same as using cash or a check, a debit card, most would argue, is much more convenient. Your debit card is linked directly to your bank account. Just like using a check, when you make a purchase, the amount you spend is automatically deducted from your account. You will save the time of writing out a check and the nuisance of running to the bank to take out cash or finding an atm machine to make a cash withdrawal. Debit cards, especially those with a credit card logo, can be used just about anywhere. While cash is also accepted just about everywhere, checks are not. For this reason, debit cards are especially handy when you are traveling and won’t be able to use checks.
When you pay for your purchases, you swipe your debit card just like you would a credit card. The difference is that when you use your credit card you are in essence taking out a loan for the amount you just spent. With a debit card you are paying for your purchase with money directly from your bank account. With a debit card you pay now, with a credit card you take a loan and pay latter. If you don’t pay off the credit card loan each month you will be charged interest, just like any other loan. With a credit card if you forget to make your payment you will be charged additional fees as well. With your debit card your bank account is charged only for the dollar amount of the purchases that you make. So, using your debit card in the long run can save you money.
With a debit card you are limited to spend only what you have, where a credit card allows you to charge as much as you want, up to your credit limit. While it might seem like a great thing to be able to charge what you want, credit cards are known for helping people to get into debt, as they spend above what they can truly afford.
There are some things you will need to consider before switching to a debit card. First, know that you will need to be very diligent about keeping good records of what you spend. You need to make sure you only spend what is in your account to avoid overdraft fees. It is also important to note that some banks do charge fees for debit card use. If your bank charges fees you may want to shop around and find a bank that offers free debit card use.
There are also times when a debit card may not be accepted or may not be the best choice for your purchase. If you are filling up your car at a gas station, know that when you swipe your card at the pump it will put a hold for a certain dollar amount on your account. This is because in order for the gas station to get an approval for the purchase before you pump, they must specify a dollar amount. You are only charged what you purchase, but it can take a few days for your account to reflect this.
Paying with a debit card for a car rental can also sometimes be tricky. You should find out what the companies policies for accepting debit cards for a car rental when you make the reservation. Some companies may refuse to rent to you with a debit card and some might do a credit check before approving the rental with a debit card.
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Credit Card Articles > Choosing a Credit Card > More People Are Switching to Debit Cards
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