debit cards

Debit cards have become very popular in the last few years as an alternative to credit cards due to its apparent advantages. Here are some of the things you have to know about these cards to be able to determine the perceived advantage and disadvantage for these kinds of cards.

The debit card is a very helpful card to some extent since it prevents you, ideally from debts and big payments due to interest rates. Since you are pulling money straight from a checking account or a savings account, you know perfectly well the purchasing power of you card. Ideally, this should prevent consumers from spending too much and plan their purchases.

However, that being said, there are some companies that process certain debit card transactions even if the card has insufficient balance. Therefore, the card becomes a credit card. According to experts, there are no governing rules regarding the prior approval as well as disclosure of the transactions you make and so it is possible that your perceived fiscal security could get undermined. It is important to talk to the bank and always check your balance before making any purchase in order to prevent overspending and paying extra fees.

The debit cards that use pins are more ideal since these pins add security to ensure that there prevent identity theft. Nonetheless, there are very big issues that are present nowadays and this concerns people who use their cards for practically everything. Here are some examples of these issues. If, for example, there is a dispute on the product that you just purchased, compared to the credit card where normally you have consumer protection, you do not have that much protection or none at all with the debit cards. When you purchase the item, your money goes directly to the merchant account and you will have to have a mutual agreement with the merchant before you get the money back.

Another advantage of the Debit card is that it works as both a purchase card and an ATM card.  That means if you want to pay for something in cash, you do that using the debit card. If you want to keep the rest of the money, you keep them safe on our account. You basically have an electronic wallet that you can use to minimize the risks of bringing too much money or tons of money that could be quite a big risk. Of course, one thing to know about this set up is that it is a lot faster to steal a plastic card than several notes of money. It is necessary that you take good care of your wallet and not risk losing your debit card.

These diverse advantages and disadvantages of the debit card should be clear to any card holder. Without the knowledge of debit cards and its dangers and benefits, you might be risking your precious savings or checking account or not using it to its full potential. As they all say: knowledge is power and the same principle also works to your card use.