It just seems that in the past few years the rules of the game of commerce in the United States has changed substantially. Despite the government efforts, the access to cash has been significantly reduced. The consumers decided in large numbers, either by necessity or foresight, to pay back their credit card debt as much as possible. In fact, it is quite a paradox to see people pay back more of their debt in difficult times while they were racking up debt in what were perceived good times for the economy.
With the growing rate of savings in the United States, the use of bank debit cards, or bank cards, has increased tremendously. The banks have followed suit and started offering bank cards with a large variety of rewards to entice the use of their bank cards, also known as check cards.
If you are unsure whether you should get a debit card, or apply for credit cards, then we will quickly list the benefits of debit cards and drawbacks of one versus the other.
Top 6 benefits of debit cards as compared with credit cards
- First and foremost, debit cards encourage mindful spending, and encourage keeping the pulse on the contents of your checking account. Quite on the contrary, credit cards encourage the mentality that your credit line is “your money”.
- Bank cards are easier to qualify for than the credit cards. There are usually no credit checks, and if you have a checking account in good standing, you can get additional bank cards with no further ado.
- Bank card transaction fees for you are usually nil, but if there are, they should be clearly stated in the bank card application materials.
- Versatility: You can pick and choose whether you want to route the payment through the Visa or MasterCard network (more secure) or whether you want to use a PIN transaction. Many people feel more secure using a PIN.
- Most bank cards carry no annual fee, but there are exceptions. Some cash back debit cars carry a $20-$30 annual fee.
- Universally accepted: Check cards carrying Visa or MasterCard logo are accepted worldwide at ATMs with the Visa or MasterCard logo. As a side note, there are more Visa ATMs worldwide than MasterCard ATMs.
Disadvantages of debit cards
- Payments for purchases might be declined due to lack of funds
- Alternatively, a payment might go through but the checking account would go into red, triggering interest payments on over-charged amount, and overdraft fees.
- In case of a fraudulent use of a bank card, most banks will honor your 100% protection. However, during the time when your case is being researched, you will be missing the funds that have been fraudulently withdrawn from your checking account. The investigations could take up as much as a week.
As you can see there are significant benefits of bank check cards, and the drawbacks can be managed by paying extra attention to your checking account status on a regular basis.