Debit card is the plastic payment card offered by the bank which is used instead of cash when doing some purchases. It is different from credit card as it uses money directly from your account. As debit card deducts money from your own account, you need to consider the pros and cons of debit card before issuing them. Let’s take a look at the pros and cons of debit card.
Pros of Debit Cards
You no longer have to keep cash when you have a debit card. You can easily do you purchase by taking out the debit card. There is no need to count the cash or write a paper check. Unlike credit card, the payment you do with your debit card is the money from your bank account so there is no need of paying the bill in the respective bank.
The debit card is more even more convenient as it allows you to take out cash from the ATM of respective bank. This mean that you can take out cash whenever there is an emergency or else you have to do cash payments when you’re out and about.
- No debt
You won’t be able to go into debt when using a debit card. The limit of spending money depends on the balance available in your bank account. You card automatically stops to work when you run out of money unless you sign up for optional overdraft protection.
- Easy to obtain
The application process for credit card is very lengthy and also you need to have a credit check to ensure you are eligible. However, in case of debit card, bank offers a debit card linked to the account. There is no need of filling application or going through any sort of preliminary check.
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Cons of Debit Card
- No reward points
In case of credit card, there are different reward schemes for its customers. You can earn points to spend on travel and other purchases. However, cards do offer their own set of incentives, such as various travel insurances or other benefits but do not offer any reward points.
- More risky
There is a high risk when disputing a charge on your debit card as the money is transacted from your account. When you want to dispute a charge if any item is damaged, may refund it happily however some may not return your money back. So, it is better to check store and product reviews online before making a purchase.
- No improvement in credit score
There is no credit score feature in debit card whereas you can build up a credit score using a credit card. It can be earned by paying credit card bills on time. A high credit score is important if you need to borrow money which can’t be using a debit card.
Hence, these are few of the pros and cons of debit card. Debit card is an easier alternative of carrying money. You can go shopping, buy online, pay on the go and many more just like credit card. It has very less hassle and works when you have money balance. Compare the debit card pros and cons and decide if you want one for yourself.