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| Are Debit Cards Smart Choices |
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| Written by William Blake |
| Thursday, 14 August 2008 09:53 |
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Debit cards are associated with checking accounts. Consumers can use them as credit cards if they contain a Visa or MasterCard logo on them. They don't incur fees like a credit card does because they are backed by the amount of money in the account. With that said, are debit cards as good a choice as they seem? A customer can choose whether or not they wish to receive a debit card at the time they open a checking account. There appearance is quite similar to that of credit cards and they are used in the same way, making purchases at restaurants and stores easy and quick. Plus, none of the charges associated with credit cards apply to debit cards. Bank commercials often glamorize the use of debit cards, as if using cash were the most terrible faux-pas in the financial world. Debit cards teach people to manage money again when they have had trouble in the past with credit cards. They come complete with a safety net because they are tied to a checking account with a set amount of funds. Checks and cash are being pushed out of the way in favor of the "new plastic". The above mentioned functions of debit cards make them seem easy to use and safe, which they can be. Be warned, however, that there are risks associated with the misuse of debit cards. In order to balance your checking account, all purchases made with a debit card should be recorded. ATM's, a modern marvel of convenience, can be a huge source of problems for a debit card user since they offer instant cash. Just as quickly as that money was deposited in your account it can disappear if you are not careful. The checking account can become overdrawn without ever bouncing a check. ATM receipts can be deceiving, because they don't always reflect the true current balance in the account if other transactions haven't cleared the bank. Like credit cards, debit cards can have funds blocked off by businesses you make purchases from. They freeze a certain amount of money until the transaction clears. For example, this means that buying $20 of gasoline at the gas station will actually freeze $50 in your checking account, causing problems if you try to spend the remaining $30. If you are able to handle your money well and make responsible choices when it comes to spending, a debit card can be great tool. The misuse of these cards, however, can cause problems, including a checking account with a balance that dips down into the red. About the Author: Debt consolidation is an effective way to pay off debt faster but it's not the best choice for everyone. Find out more about whether you should consider consolidating your debt on the Inside Debt Consolidation website at http://www.insidedebtconsolidation.com Kindly provided by LJ-Marketing.dk You are welcome to use this article on your own website, if you include the link just before this text. |
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