Advantages for using Debit Cards

Ten Advantages for Using Debit Cards

Debit card use has come a long way in a short amount of time.  More and more businesses are rejecting checks because of kiting problems.  Debit cards are great for businesses and consumers.  When they were first introduced debit cards were not widely accepted like a credit card for car rentals, hotel rooms or a host of other options including some online web pages.  Today that’s changing.  More user-friendly options are open to debit card users than ever before and bank protections are improving every day.

As with any financial transaction there are risks and it is prudent to forewarn that there are security considerations in addition to enjoying their ease-of-use benefits.

Unfortunately, politicians have gotten into the debit card act and with the passage of the Dodd-Frank Wall Street Reform and Consumer Protection Act and signed by Barack Obama. Unfortunately with the signing of the bill, higher consumer costs for debit card use are on the way.  There will be more about the impact of this bill on debit transactions later in this article. 

Ten Debit Cards Tips

1.  There’s one less thing to carry since you no longer even need a check book.  With very low purchase amounts per transaction you don’t even need a signature in many cases.

2.  Effortless use is probably the most convenient thing about debit cards. Just a swipe through the slot and the info is recorded to your checking account.  Time consuming check writing or rewriting, if you make an error, will become things in the past and you don’t have to waste a check. 

3. With debit cards, you don’t need nearly as many checks and don’t have to worry about lost checkbooks.  

4. Costs are born primarily by the merchants who pass those extra costs along to the consumer in the form of slightly higher product or service costs.

5. Balancing debit card withdrawals on your bank statement is similar to checks so if you use a check writing software program it’s quite simple. The user just refers to the statement’s list just like a list of checks. 

6.  When traveling, usually checks are not accepted in beyond a hundred miles or so from home, but debit cards can be used out of state when checks cannot.  Some banks issuing the debit card may restrict their use in some states or areas because of higher identity theft in those locals.  It’s recommended that a bank’s restrictions to be reviewed to be sure where they usable.

7.  International use of debit cards depends on the bank and country but, if your bank does allow you to use debit cards it can help reduce exchange rate issues which can be dealt with automatically.

8.  A debit cards can be used to rent a car and hotels now.  However, you may have to have an instant credit score validation to use them.  

9.  Safety and security issues can be reduced if you’ve had to carry large amount of cash in the past.  A debit card can reduce that need.

10. For those trying to break the habit of credit card use, a debit card can help.  We’ve all seen the proliferation of shows devoted to personal money management such as Suzie Orman, Dave Ramsey or Gail Vaz-Oxlade host of “Until Debt Do Us Part.”  In every case, the excellent suggestions these advisers agree on is get rid of credit cards.  In a way a debit card can fill that ease-of-use void that a credit card provides.  But of course, it is not a charge card, which can force the user into more carefully monitoring his or her personal spending, which can be a very good thing.  

As convenient as a debit card can be, any user should be aware of the potential problems as well.  The numbers can be copied and used.  Keep a close monitor on your bank account. Check with your bank for their policies to protect your finances when using a debit card.

A debit card is very convenient but there are some problems developing which are the result of the Dodd-Frank bank bill.  These problems are just starting to be realized and involve the fees banks charge for debit card use.  Prior to the bill, banks charged the merchant a flat 1.12 per cent per purchase whether it be a candy bar or TV.  Dodd-Frank only allows the bank to charge twelve cents per purchase meaning that, those fees will have to be made up from somewhere.  It should come as no surprise that the consumer will be hit by additional fees from the bank.  Possibly consumers will pay those new fees in the forms of bank charges on your checking account rather than being incorporated into the system between the merchant and bank.

Bank officials do have a warning that is good advice in all financial circumstances.  Pay close attention to your bank balances and transactions.  It’s the best form of protection, even though many banks do have warning systems in place when there are suspicious debit card activities on your account.