A debit card is highly recommended by finance experts for a lot of reasons. For one, a debit card is great for cashless and convenient transactions even if you have a bad credit rating. It can also help you reduce and control credit card spending. Lastly, using a debit card is cheaper than a credit card because there is no interest rate to worry about.
These advantages could be the reason why in most parts of the world, the use of debit cards is continuously increasing and giving people more freedom to make purchases without having to use cash.
Owning a checking account debit card is generally beneficial. But when and where?
Here are the BEST times to use a debit card:
When you can’t fully pay the credit card balance on time. It’s always tempting not to pay the credit card balance at all. But if you won’t settle it, you’ll suffer a negative record for a long time. Better play it safe and use a debit card. This won’t have a balance that you have to pay and will not accrue interest like a credit card does.
When you spend more than you earn. It’s a golden rule—never spend more than you earn. With a credit card, you are spending the money that is not yours yet. With a debit card, you are spending only the money that you already have.
Meanwhile, here are the WORST times to use a debit card:
When your account is low on funds. Payment from a debit card is instantly released and you must have the funds available in your account. If you do not then the transaction will be denied, this can be frustrating when you urgently need to buy something. If you have an overdraft then the transaction will be processed but then there may be other charges from your bank.
When you are afraid of liabilities due to fraudulent purchases online. You will pay for fraudulent purchases made with your debit card unless you have notified the bank within two days that the card or its number has been stolen. With a credit card, you are not liable on purchases that were proven fraudulent.
Credit cards may still be the best cash-less way to purchase and pay bills for some people, but in these hard economic times where people are afraid of getting further into debt they are not the best option. Overall using a debit card and only spending what you have available is the smarter option.