You’ve just found an amazing store. Inside there are tons of things that you can use at home. You browse around, pick up a few of those great products, and then proceed to the cashier. After ringing up your total, you have multiple payment options you could provide. Gone are the days when cash or check were all you had. Debit cards are even more popular than checks, even with some of the disadvantages they provide. Should you transition over to a debit card for your purchases? Here are some of the key advantages and disadvantages to consider when using debit cards for your routine purchases.
Advantages of Debit Cards
1. You don’t have to carry cash with you.
Cash isn’t easy to track. If someone steals it from you, then you’ve just lost that money and there’s not much you can do about it. If someone steals your debit card, however, you can call your bank or credit union and put an immediate stop on that card so it can’t be used. This means you have an extra level of defense because you don’t have to carry cash everywhere you go.
2. It is keyed to your identity.
Some debit cards have your picture on the face of the card. A PIN is required to access the account, especially if credit functions are disabled. There’s also a chip and a signature security option which can be utilized. If a business is on the top of their game, a debit card keyed to your identity can be stopped before it is fraudulently used.
3. They are widely accepted around the world.
Instead of taking traveler’s checks with you or other alternative payment methods, you just bring your debit card. You can even make purchases in foreign currencies and for a small fee, your financial institution will calculate the amount needed to withdraw funds from your account.
4. They can be used as a credit card at times.
Not every retailer takes a debit card purchase, but they may accept a credit card purchase. As long as your debit card is branded with Visa, MasterCard, or another payment processor that is accepted, you can still make a purchase.
5. Multiple debit cards can be associated with one account.
This is a great option to have for couples who share a bank account. Instead of needing to print multiple checks, two debit cards can be issued and both will work to make purchases or take out cash as needed.
Disadvantages of Debit Cards
1. It is easier to steal your money if you lose a debit card.
Although PIN and chip technologies help to protect your identity somewhat with a debit card, this technology is not perfect. If you should lose your debit card, someone could still run it as a credit card instead. If a cashier fails to ask for proof of identity during the purchase, you’ve lost cash and could have a major headache on your hands.
2. It can be easy to lose track of your account balance.
When you wrote a check at the grocery store, you often had a separate balance register to keep track of your purchases that you can write down right then. This allowed you to know what was in your checking account – assuming you kept that register current, that is. With debit cards, you just swipe and go, which means you might be making a purchase without understanding what is available in your account.
3. Not every retailer accepts debit cards.
Although this disadvantage is becoming more rare, there are still situations where you can’t use a debit card. Some merchants are cash-only and if all you’ve got is your debit card, you’ll have to go somewhere else or hit up an ATM to get what you want.
4. Many debit cards have daily limits.
Many financial institutions will put a specific limit on the amount of cash that can be withdrawn from a debit card on a daily basis. There may be purchasing limits involved as well. Sometimes you can have these limits waived, but some limits may also be mandatory. This limits the effectiveness of your account.
5. They wear out over time.
The magnetic strip on the back of the debit card doesn’t always read right. After so many swipes, it eventually wears out. Eventually even the plastic bag trick for the debit card stops working. If that occurs before your expiration date, then you might have to pay to get a new card.
These key debit card advantages and disadvantages are just a few of the issues to consider when using this payment method. What do you like about using a debit card? We’d love to hear your thoughts about this cash-free payment option.