The Good and the Bad of Debit Cards

A debit card is sometimes offered by backs to account holders in place of a standard ATM card. It is still an ATM card however because it has a MasterCard or Visa logo it can also be used like a credit card, with a couple of exceptions. First a debit card takes the money direct from your bank account therefore it does not incur any fees. So is this good and should you be using a debit card?

When you open a checking account and sometimes a savings account you can elect to have a debit card in place of an ATM card. You can use a debit card in much the same way as a credit card, only without all the fees and penalties that go long with a credit card should you miss or become late on a payment. You will find that you can purchase things in stores and restaurants that you could not have previously purchase without having cash on you. It’s now like those commercials that show how well everything moves along because of using a debit card then all of a sudden someone tries to pay cash and everything grinds to a halt.

If you are someone who is not good at managing money, then a debit card might be good for you. Debit cards are able to teach people to manage money, especially those who overspend a lot or have had issues in the past dealing with credit cards. These cards come with a safety net because of the fact that they are joined with the checking account which provides only as much money that is in the account itself. Say goodbye to checks and dollar bills because plastic is the new trend.

You now know what a debit card is and how it works and there is the other side of this coin to consider. If you think you can control your spending habits and not use the debit card unwisely they can be a great benefit to you. However some do not use them wisely and if not used carefully they can have great troubles.

Because the card works with the checking account, transactions are recorded and processed through the use of a computer program. The debit card’s unsuspecting enemy is the ATM machine. Though these machines to so seem like Heaven on Earth, they are not, despite the fact that within two minutes, you have money shooting out into your hand.

Unfortunately, just as fast as you get money or deposit money into your account, it can just as quickly go away. If you are careless with your debit card, you are sure to run into problems. A checking account can be overdrawn, even if you don’t bounce a check. Another downfall is that the receipts the ATM machine provides are not always the most up-to-date.

Debit cards can also be blocked just like a credit card. Banks and many stores can block a set amount in the account until a certain transaction has processed. For example, if you pay $30 for gas using your debit card, and the store blocks $60 on the card and you bought something worth $30, you will run into many issues until the block is removed from your debit card.

In all, debit cards are nice to have if you are a responsible and careful person. Using them wisely is very important, and if you don’t you will run into trouble.

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