Despite making a payment by cash, a debit card is used to pay for any type of goods, one buys. The most used banking product has other names like plastic cards, ATM cards, Plastic Cash, and checks cards. At the time of any transaction, the money comes straight out of the person’s bank account which is not the case with using a credit card.
Most people favor it because of the different Advantages of Debit Cards. One does not have to carry cash and a checkbook everywhere when one has a debit card. Debit cards are easy to carry and are mostly accepted even when the person leaves his own country.
Using a debit card has its disadvantages too like different fees are imposed by banks on cardholders and it is less safe as it gives access to any holder to use it.
Difference Between Debit Card and Credit Card
|Debit Card||Credit Card|
|Own Money||Borrowed Money|
|Transaction Limit up to Balance||Transaction Limit up to Bank|
|Consumption within Resources||Consumption above resources|
|No chances of Bankruptcy||High chances of Bankruptcy|
There are pros and cons to using both credit cards and debit cards. A debit card seems much like a credit card but there is a difference between a credit card and a debit card. A credit card works differently. A credit cardholder borrows money from the bank or the account to pay the dealer. While using a debit card, money is directly transacted out of the user’s account.
There are bad things about a credit card also. A person can make a limited transaction set by the bank. But a benefit of the debit card is that it has no such limitation.
The credit card user is able to get loans on a swift basis. Certain banks in different countries offer security on transactions made by the cardholder. Often they come up with certain policies which are quite attractive to customers.
There are other limitations to using a credit card. Many users don’t put a check on debts and become bankrupt. Research has shown that credit card holders often consume unhygienic food and become spendthrifts.
The interest rate is increased after a year in the case of credit cards but it is not the case with debit cards. Merchants feel easy with debit cards instead of cash or credit cards. Also, debit cards do not put you under the weight of debt like credit cards do.
How Does a Debit Card Work Online?
If one is buying or shopping online, one can pay in the following manner. He or she has to select the option of payment with a credit card and then type the sixteen digit number which is mentioned on the front of the debit card. Also, the expiration date is in needs to be entered and a security code that helps to prove that one is illegible to use the card. The correct billing address is also asked for.
Tips for Using the Debit card
- One should keep it safe like other valuable possessions.
- It is better to keep a record of all the past receipts of transactions made by credit card.
- One should inform one’s bank in case one loses the card.
What do People Prefer?
There is no definite number or any proven research to know about the use of a debit card or credit card. But most people give preference to debit cards as they save you from debt.
Advantages of Debit Card
|Advantages of Debit Card||Disadvantages of Debit Card|
|Safer than Credit Cards & Cash||High fees|
|Online Shopping||Limited Online Usages|
|Track your Spendings||Auto Transaction on Recurring Payments|
|Available even for Bad Credit|
|Fewer Loss than Credit Card|
Easier to getting
Top on the list of Advantages of a Debit Card is that it is easier to get in comparison to a credit card. Bank can issue a credit card linked to one’s account without following any lengthy procedures.
It is quite convenient as it saves a person from the trouble of carrying a paper check to a bank. It is also helpful during shopping as one doesn’t have to carry cash all the time. Money can be transacted at the need of the hour. It also saves one from making a payment with a credit card at a later time.
Another key feature of a debit card is that it is accepted most of the time when one is out of his hometown.
It doesn’t take much time to purchase through a debit card. And mostly dealers and merchants don’t inspect much in the case of debit cards.
Saves You from Debt
When one uses a debit card one doesn’t get in debt because one can use only that much money that one has in his account. It is unlike a credit card where taking a loan is essential for the person and he becomes indebted to the company along with taxes and interest.
Easy to use
It is easy to use a debit card anywhere at any place. Purchasing and shopping become much more convenient with a debit card.
No Interest Charges
There are no interest charges while purchasing through a debit card.
Useful for Withdrawing Cash
One can use one’s debit card to withdraw cash from an ATM, just by inserting the card and pin number (of a debit card).
Small Fees Imposed by Banks
Different fees are imposed by banks on credit cardholders. It may include monthly charges or transaction fees. The additional fee is costed on each transaction from any other bank. But in Debit cards, there are three most common fees and have flat rates
- Annual Fee
- International Transaction Fee
- ATM Channel partner withdrawal fee
Like credit card online login, Banks offer you to check your bank account online which is associated with your debit card. It is simple, easy, and convenient to check your account statement, transfer funds, request a cheque book and many more.
There is no risk in a debit card for the money you have in the account, Just keep your PIN secret.
Gives Limited Access to Money
The credit card offers unlimited money from the account but the debit card only offers a limited amount of money from the user’s account. So, it helps to manage your debt and keep within the budget.
Many banks in the US, UK, and Asia offers reward programs with the use of a debit card for purchases and online use.
Lisa is a passionate travelers. She spends 3 months every year visiting different places worldwide. She has visited almost every famous place in the world. She herself is an affiliate blogger