The Risks You Take When You Move To Debit Cards

Debit cards are getting a lot of positive praise nowadays. Most of it is well deserved too. Credit card have become too risky and expensive. Interest rates and going sky high, credit limits are getting cut almost at a weekly basis, fees are also getting more expensive and banks are adding even more fees to the ones that they already impose on you.

The problem with credit cards is that your purchases are paid for by loans. These loans often have interest rates as well. Also, if you miss out on a payment for the loan, your interest rate will be raised and you will also get hit with a fee. On the other hand, if you use a debit card, the payment for your purchases will come directly from your bank account. You don’t take out a loan and the purchase is paid for directly. Thus, you are not at risk of getting into debt.

While debit cards do have a lot of advantages, there are also some risks involved when you opt for debit cards instead of credit cards.

When you use a debit card for paying for your purchases, you have to know that your money in the bank account which connects to that debit card is immediately deducted for the purchase. You therefore have to keep a careful eye on your bank account and keep it from running out. There is an added danger when using debit cards of having your check bounce if your debit card is tied to your checking account. It might happen that you unintentionally empty your account before your credit card clears which will result it to bounce.

Another important thing to know about debit cards is that, if you use a debit card, you cannot expect the same form of fraud protection as with credit cards. The problem is that debit card purchases take money out from your bank account immediately which makes it harder for the authorities to undo fraudulent purchases. Unlike credit cards which pays purchases against a loan which are much easier to reverse in cases of fraud. If your debit card is stolen or you suspect your card number is being used fraudulently, then you must report it as quickly as you can.

Your debit card also do not offer you the same purchase protection that you get if you use a debit card. This means that, if you have a problem with your purchase using a debit card, it is going to be more difficult for you to have that problem corrected than if you had used a credit card.