Consumer, media and market research firm Mintel recently confirmed what some analysts have been suspecting: America’s love affair with credit cards is on the decline. Instead, consumers are being a lot more careful with their spending, choosing to use a debit card to make many of their purchases. When using a debit card, money is immediately withdrawn from the consumer’s checking account with no payments due later. All the consumer has to do is track withdrawals much as they already do in a checking account ledger to avoid overdrawing their accounts.
Debit Cards Aren’t Always The Best Approach
As with anything, there are draw backs with using a debit card. Some minor, some major. Let’s take a look at what you need to know about using a debit card, particularly if you plan on shifting your purchasing behavior over from credit cards.
Why Using A Debit Card Makes Good Sense – Perhaps the best reason for using a debit card is that you don’t have to carry cash. This is particularly useful if your purchases are being made in the US, though most debit cards are accepted wherever credit cards are used. In most cases all you need is the “Visa” or “MasterCard” imprint on your card to give the merchant the confidence that your card is good. And, thanks to technology, your debit can be immediately confirmed through the same digital device used to make a credit card payment.
Why Using A Debit Card Can Present A Challenge – Most new debit card users find that they must get used to tracking their purchases much in the same way they track deposits and withdrawals from their checking account. This means updating your check registry frequently, something you can do between receiving monthly statements by logging in to your account online.
Why Using A Debit Card Can Be A Bad Idea – If you use a credit card, you have certain protections you may take for granted. For instance, if you have a problem with a merchant such as not receiving services rendered or there is a problem with the item you purchased, most credit card providers offer payment protection at no additional cost. With debit cards you don’t usually have that protection for the simple reason that the bank treats debits just like a check being drawn against your account.
Points Programs May Not Be As Generous
Finally, with a credit card you may be able to obtain other benefits, such as points which can be redeemed for rewards while most debit cards do not offer these programs at least to the same degree. Still, the trend to debit card usage is a good one as consumers take control of their debt and manage their lives carefully with each purchase.
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