A debit card is a great tool for making purchases, just like its cousin, the credit card. And just like a credit card, it comes with both pros and cons. This article will tell you what they are, to help you understand how a credit card works and what it can do for you.
Pros of a debit card
1. It’s convenient
With one of these bad boys in your wallet, you don’t have to carry any cash with you wherever you go.
2. It can help you purchase items much faster
Merchants like debit cards much more than checks or credit cards. Not to mention that using a debit card is much faster than writing a check.
3. It will help you stay within your budget
Unlike credit cards, debit card won’t allow you to spend more than the amount of money you have in your account. This is a great way to avoid accumulating debt.
4. They are really easy to get
Debit cards are much easier to get than credit cards. You don’t have to deal with FICO scores or lengthy applications. Just ask your bank to give you a debit card that is linked to your account.
5. You can always get cash
If you need cash, you can always use your debit card to get some from an ATM. It’s easy. You just insert the card, then you put in the PIN number and choose how much money you want to withdraw.
Disadvantages of using a debit card
1. It’s not as safe against fraud
If a thief gets a hold of your debit card and your PIN, you can lose all the money in your account. And it will be much harder to get it back.
2. There may be extra fees
Some banks may charge extra fees for certain services, for transactions, for going over the limit or more.
3. It does nothing for your credit score
A debit card is not a credit card. What you do with it really doesn’t matter for those calculating your credit scores.
4. There are no rewards
Debit cards don’t come with rewards programs. This is one of the main reasons why people choose credit cards.