How do you pay for your day-to-day expenses? Many consumers prefer cashless purchases because they are more convenient. Now, You don’t have to wonder about having enough cash or locating a pen to write a check when using a debit or credit card. These two types of plastic, however, are not created equal.
While you may be aware of credit card perks such as points and cashback incentives, you may not know that debit cards may provide many of the same advantages. Continue reading to learn how to make the most of cards and the advantages of debit cards.
As we all know, debit cards have become increasingly popular in recent years. They eliminate the need to always carry actual currency with them, make transacting and paying simply in a couple of seconds, and are also widely accepted.
You may pay with your debit card or plastic money connected to your bank account everywhere, from your local grocer to large restaurants and retail establishments.
Guaranteed Protection
Debit cards are safeguarded by a four-digit PIN (Personal Identification Number) that you create. This PIN is required whenever you use your debit card to make a purchase, providing a high level of security against theft.
You are also notified if a transaction is completed, which double-verifies the transaction. You may also freeze these cards quickly and simply. So, if you lose it, you may avoid harm by rapidly freezing it.
No Service Charges
Unlike credit cards, which can include annual fees, late payment penalties, significant international transaction fees of up to 3%, and other pricey extras, debit cards usually have few or no costs. As a result, you can avoid paying a charge entirely if you use your debit card wisely.
Some banks, for example, charge a few dollars (in addition to the ATM cost) when you withdraw cash from an unaffiliated ATM. However, “ATM fees” can easily be avoided if you plan ahead of time. For example, when you know you’ll need cash, you may go to an in-network ATM or use a store’s easy “cash back” option when you pay with your debit card.
Because a debit card functions as an electronic check, withdrawing funds from your checking account as you use it, you may suffer an overdraft charge if you use it when your account balance is low or negative. However, this is another cost that you can easily avoid.
Many banks provide overdraft protection services ranging from lines of credit to card rejection for insufficient money to prevent you from mistakenly overdrawing your account. In addition, you may check your balance from anywhere using online and mobile banking to ensure you have sufficient balance before using your debit card.
It Helps to Stick to a Budget
One of the most delicate features of a debit card is that you cannot spend more money than you have, preventing you from going into debt. In addition, this helps you budget since the money is removed from your account each time you transact.
Easy to Use
Debit cards are easy to use. Because the payment is debited straight from your bank account, where the money already exists, you may complete it immediately.
It is significantly faster than waiting for a credit transaction to clear or worrying about having enough cash in the account to meet your costs. Debit cards make transactions quick, simple, and convenient.
Tons of Rewards
Have you heard of credit cards with rewards? Some debit cards are now participating in the rewards game. You may earn points for every dollar you spend and redeem them for travel, shopping, or gift cards.
Typically, the benefits are for transactions made using your signature rather than your PIN. The method is the same with credit cards, but you get no annual fee, no interest charges, and all the other debit card benefits we’ve already stated.
On the other hand, Merchants prefer debit card transactions, particularly the PIN input version, because they pay banks less per swipe than credit card transactions. As a result, some retailers prefer debit card payments, especially those with a PIN.
Conclusion
Debit cards offer the same benefits as credit cards but with fewer drawbacks. For example, avoid yearly fees, late fees, and international transaction costs. Furthermore, if you are concerned about over-drafting your account, you may quickly set up overdraft protection to avoid any mistakes.
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