Advantages and Disadvantages of Debit Cards

Credit cards have been in existence since the 50s while the debit cards came into being in the 70s. Basically, a debit card is linked to a bank account meaning that any money you spend gets automatically deducted and doesn’t incur any interest or extra hidden charges. If you use your debit card to pay for your daily expenses and bills, you will give yourself a precise picture of how much you use monthly.

Useful Information on Debit Cards :

- Use your debit card only when it is within your sight because due to advancement in technology, some electronic devices can capture your card information and use the details to make purchases and before you notice you will have lost all money

- The highest liability for a stolen or lost debit card is $50, but it has to be reported two days within the discovering of the loss

- Never carry your PIN together with the card, just memorize it and if possible, destroy the Pin slip. If the digits are hard to memorize, request your lender if you can change the number to one that will be easy to remember. You should however avoid temptations of using digits that are easy to figure out such as birthday, house address, anniversary, last four digits of your Social Security No. etc..

- Liability becomes unlimited if you don’t report to the bank of any suspicious charged 60 days within receiving the bank statement. If you report within the agreed time frame, the liability gets limited to $500.

- Always sign your debit card when you receive it

- Keep all debit card receipts and only destroy them after confirming that everything matches up

Did you know that if you use a debit card in place of a credit card you will end up saving a lot? Here are the advantages and disadvantages of using a debit card :


- Most of these debit cards have the MasterCard or Visa logos hence are accepted everywhere these logos are.

- Very convenient substitute to checks when shopping online.

- Allows you stay within your budget since you can only spend what is on the account. Be advised though that most lending institutions have an ‘overdraft protection offer’ that allows consumers exceed the balance. There is a catch though, you will pay an interest and perhaps some extra fees charged on the money borrowed from the overdraft account.

- It takes a shorter time to complete a purchase since one doesn’t have to wait for a check to get approved. Further, you wouldn’t have to carry a checkbook, traveler’s check or worse still cash.


- You may incur bank fees like annual or sometimes even monthly service charges, or sometimes dropping past your minimum acceptable balance. As such, you should ensure you discuss all charges and possible fees with your lending bank

- If you are used to getting user rewards, forget them as they aren’t applicable with debit cards

- Note that the debit card doesn’t improve your credits core because it isn’t a credit card and is never reported to credit reporting bureaus

- It is very hard to resolve disputed charges because unless you own a PIN-based direct debit card, whoever knows your PIN can use the card

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