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 card and check card. 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.
Mostly people favor it because of different Advantages of Debit Card. One does not have to carry cash and a checkbook everywhere when one has a debit card. Debit cards are easy to carry and 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.
Debit VS Credit Card [Differences Compiled with benefits]
There are pros and cons of using both credit card and debit card. A debit card seems much alike 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 to 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 debit card is that it has no such limitation.
The credit card user is able to get loans on 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 for customers.
There are other limitations of using a credit card. Many users don’t put a check on debts and become bankrupt. Researches have shown that credit card holders often consume unhygienic food and become spendthrift.
Interest rate is increased after a year in 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 debts 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 pay with credit card and then typing the sixteen digit number which is mentioned on front of the debit card. Also expiration date is in need to be entered and a security code which helps to prove that one is illegible to use the card. Correct billing address is also asked for.
Tips for Using 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 people prefer?
There is no definite number or any proved research to know about the use of debit card or credit card. But mostly people give preference to debit cards as they save you from debt.
Features and Advantages of Debit Card
Easier to get
It is easier to get debit card in comparison to credit card. Bank can issue a credit card linked with one’s account without following any lengthy procedures.
Convenient
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 in the need of hour. It also saves one from making a payment with a credit card at a later time.
Easily acceptable
Another key feature of a debit card is that it is accepted most of the times when one is out of his hometown.
Time saving
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 which one has in his account. It is unlike a credit card where taking 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 becomes much convenient with 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 card and pin number (of debit card).
Small Fees imposed by banks
Different fees are imposed by banks on credit cardholders. It may include monthly charges or transaction fee. Additional fee is costed on each transaction from any other bank. But in Debit card, there are three most common fees and have flat rates
- Annual Fee
- International Transaction Fee
- ATM Channel partner withdrawal fee
Online Banking
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 cheque book and many more.
Risk Free
There is no risk in debit card for the money you have in account, Just keep your PIN secret.
Gives limited access to money
Credit card offers unlimited money from the account but debit card only offers a limited amount of money from the user’s account. So, it helps to manage your debt and keep in budget.
Reward programs
Many banks in US, UK, Asia offers reward programs with the use of debit card for purchases and online use.