Advantages And Disadvantages Of Debit Cards
The credit industry is abuzz these days of the increase of debit card use among consumers. Debit cards have recently surpassed credit cards in terms of transaction usage among American consumers. The reasons why consumers are doing this are quite easy to see.
Ever since the credit card crisis hit consumers, they have been very wary of the risks that credit cards bring. Its a surprising thing considering that the risks have always been there. You can blame it on credit card companies who, in the past encouraged credit card overspending in the hopes of credit card holders revolving their balances which meant more profits for credit card companies in the form of interests and other fees. Because of this, many credit card holders got complacent and thought they could charge their purchases on their credit cards indefinitely. Now, credit card holders have to relearn responsible spending and they are liking credit cards less and less.
Debit cards, on the other hand are getting a lot of attention among consumers. While credit card usage is slowing down, consumers are still reluctant to let go of the convenience of using plastic and using cash instead. Thus, many are moving to the convenience and relative safety that debit cards have to offer.
Unlike credit cards, when you make purchases against debit cards, your purchases are paid for directly from your bank account. Thus, you have no balances to worry from and, as long as the balance in your bank account can cover your purchases, you don’t need to worry about any fees and interests. Debit cards basically offer the same type of service as credit cards do but there are differences, however.
For starters, debit cards don’t earn as much rewards points as credit cards do. If you are a reward chaser, then you should probably stick to your credit card. Another thing to remember is that debit cards don’t get as good protection as credit cards get. If you have a debit card and it gets stolen, you should immediately alert your card issuer about it and have the card blocked. Otherwise, you might just be liable for any purchases made against your stolen credit card. Debit cards also take money directly from your bank account so you need to keep a sharp eye on your bank account. You do not want to overcharge. Unfortunately, debit card issuers will allow overcharging so that they can collect a large fee for it. There are, however legislations being drafted to block overcharge fees.
On the whole, debit cards are a smart choice for plastic payment. The market is, however, relatively new and both the card holders and the card companies are still adjusting to it. If you recently moved to a debit card, you can expect more benefits to come as the consumer market adapts to it.
