There Have many advantage and disadvantages of a debit card. Even though debit cards have been widely used, many people are unfamiliar with their advantages and disadvantages. Debit cards look like credit cards but act like cash or personal checks. Debit cards, as we all know, have been in great use in recent times.
They have eliminated the need to carry physical cash around. Not only do they make transactions and make easy payments in a matter of seconds, but, they are widely accepted. From your local groceries to major restaurants and retail outlets, you can pay with your debit card or plastic money, which is linked to your bank account.
Debit cards can work in two ways:
- Like ATM card for immediate cash withdrawal
- Like a check when purchasing an item. The money used to pay for the transaction is usually deducted from your account within a day or two when the retailer presents the transaction for payment.
Advantages of Debit card:
- Easy to obtain. Once you open an account, most institutions will issue debit cards to you on request. The only and most important thing you should have, in which having a debit card is a bank account. Any person can open a bank account with a minimum deposit amount. Therefore, you can use a debit card with only one pre-requisite bank account linked to your card.
- Convenience.Purchases can be made using a chip-enabled terminal or by swiping the card instead of a paper check. Debit cards are very easy to use. Since the payment is deducted directly from your bank account, in a place where the money is already present, it can be done instantly. This is much faster than waiting for a credit transaction to go or worry about having sufficient amounts of cash in the account to cover your expenses. Debit cards make transactions fast, easy and convenient to use.
- Safety. You do not need to carry cash or a chequebook.
- Readily accepted. When outside the city (or out of the country), debit cards are generally accepted widely (tell your financial institution that you are leaving your city, there is no interruption in service).
- Works as an Emergency Fund. Debit Cards have the ability to give you cash. They double up as ATM cards and allow you to withdraw money from an ATM. Therefore, working as an emergency fund for you. In addition to the ATM use, a majority of stores offer cash back options at the checkout. You can shop conveniently and reasonably using your Debit Card.
- Self-protected.Debit cards are protected by a four-digit PIN number or PIN (Personal Identification Number) that you set yourself. This PIN is required when making almost any purchase with your debit card. This gives you a great deal of protection against theft. You also get a notification every time, repeating the verification of the transaction. These cards can also be frozen very easily and quickly. So if you lose it, you can save it from damage by freezing in no time.
- Sets a budget. The best thing about a debit card is that you cannot spend more money than you have, which means that you cannot go into debt. This helps you to create a budget, because every time you do a transaction, money is withdrawn from your account.
Disadvantages of a Debit Card
- No grace period. Unlike a credit card, a debit card uses money directly from your checking account. A credit card allows you to borrow money on credit, leaving disposable cash in your account.
- Check book balancing. It can be difficult to balance your account until you record every debit card transaction.
- Less protection. Most financial institutions will try to protect their client from debit card fraud. However, a customer may possibly be liable for up to $ 500 on fraudulent debit card transactions, compared to just $ 0 on a credit card. To know the details, please check with your financial institution.
- Fees. Using your debit card for ATM transactions can be costly if the ATM is not affiliated with your institution.
- INSTANT MONEY MEANS INSTANT RISK.If someone catches your card and you do not report it immediately, the thief will be able to withdraw money from your card immediately from your PIN number. Also, the charges levied on credit cards are easily disputed and will never interfere with your line of income like a debit card.
Some Safty Tips
Protect your debit card against loss or theft, keep it in a safe place like cash, credit card or check.
If you lose your debit card, immediately inform your financial institution
Choose a PIN number, only you know. Recommended, you can not use your phone number or birthday
Guard your PIN number. Remember it and never write it
Keep receipts from your records
Review your statements promptly and check any unknown transactions.
Use the chip-enabled technology if available. For the most secure transaction, if a retailer provides a chip-enabled terminal, use it instead of swiping the magnetic stripe.