Whether you’re trying to teach a teen how to manage money or get control of your own finances, debit cards can be valuable tools that can help you through the process. There are numerous different ways that they can do so, addressing a wide range of different issues or problems. If you’re unsure of just why they really can help you, reviewing a couple of simple things may be able to help you see that getting control of your finances is much easier when you utilize the tools and features that are residing in that piece of plastic in your wallet.
First of all, since debit cards are linked to your bank account and since your activity shows up quickly, it’s easy to track purchases. With a debit card and an online banking account you can practically eliminate the need for balancing a checkbook manually. For many, regularly noting each purchase can be overwhelming, but debit ensures that this isn’t an issue. And since your spending is linked to your bank account, opting out of overdraft protection will ensure that you don’t run the risk of accidently spending more than you can actually afford. You’ll get an insufficient funds message instead of a massive overdraft fee.
Also, prepaid debit cards allow you to load money onto a card and spend it just like you would a regular card. The difference is that these accounts aren’t connected to your main finances in the least. They’re perfect if you’re having a hard time controlling your spending responsibly or if you have teenagers or younger kids who need to learn the value of money management without running the risk of driving up your interest rates, overdraft fees, or other issues that often come with the misuse of a credit or debit card that teens are famous for.
Interest rates are nonexistent with debit cards, which is another reason they’re great for budgeting. Spending on credit cards can result in huge interest fees that you may underestimate. What seems like a good buy now could actually cost you twenty to thirty percent more due to those interest charges. If you’re trying to avoid drowning in debt, debit makes it easier. And you’ll even save more than you would spending cash, since you won’t just toss change into a pile. Those nickels add up more than you realize, and using a debit card instead of cash can help you save money.