What Your Bank Isn't Telling You About Using Your Debit Card
What Your Bank Isn't Telling You About Using Your Debit Card
Here's what your bank isn't telling you about using your debit card — and what savvy spenders do instead
Vawn Himmelsbach Updated May 31, 2024 Moneywise
The use of debit cards has been prevalent in the U.S. for decades, and for good reason. They offer several advantages over other forms of payment, such as cash and checks.
However, they also have a few downsides — and knowing what these are might make you rethink how you're paying (at least in some cases).
Since 2005, the number of debit card transactions in the U.S. has exceeded the number of credit card transactions, according to data from the most recent Federal Reserve Payments Study — and that gap has been steadily increasing.
In 2021, for example, there were 87.8 billion non-prepaid debit card transactions versus 51.1 billion credit card transactions.
But what is your bank neglecting to tell you about debit cards? Here are a few things you need to be wary of.
Pros And Cons Of Debit Cards
Many people prefer the convenience of a debit card, versus carrying around cash. These days, debit cards are accepted at most retailers (while checks are only accepted at a select few), and they’re not subject to surcharges that some merchants charge for using credit cards.
Another advantage is that using debit can help to control spending. You only spend what you have, and you can easily monitor transactions since they appear in your account immediately. This can help to prevent you from racking up debt.
But there are some downsides. Most debit cards have a daily spending limit, which can be an issue if you need to make a large purchase or several small purchases in a day.
Additionally, a debit card will not help you build a credit history, and if you spend more than you have in your account, you could be charged overdraft fees. While many credit cards offer rewards for spending, this isn’t as common for debit cards.
Beware Of Phishing And Skimming
TO READ MORE: LINK