Financial Tips

Consumer Credit : Utilizing Debit Cards

Debit Cards - Like Credit Cards, But Without The Debt

In today's world, getting by without a credit card is getting more and more difficult. For a long time, it's been nearly impossible to rent a car or stay in a hotel without a credit card. Although, you can still give them a credit card number to make a reservation then pay with cash or a check later. However, if you want to purchase anything over the Internet or by telephone, there's nearly no way around using a credit card.

One of the easiest ways to avoid this dilemma is simply not to buy anything online or by phone. Often the prices are not that great, especially after you add in the shipping and handling costs. And you've been getting by without it for so long, there's no reason you can't continue making your purchases at an actual store with cash.

However, I realize that, because of the convenience and selection, it's not realistic to expect people to avoid online shopping altogether. That's why I think that debit cards are one of the best ways to handle your shopping. With a debit card, you get all the convenience and flexibility of a credit card, without incurring any high-interest debt.

A debit card looks just like a regular credit card. When you present it upon making a purchase, the merchant has no idea that it's not a regular credit card unless you tell them. They run it through the scanner and print a receipt for you to sign. That's it, you're done. The only difference is that, instead of incurring a debt in the amount of the purchase, that amount is deducted from your checking account.

And the best part is that you can use them for purchases online or by phone. A debit card, like a credit card, is issued by a bank or credit union, in conjunction with a major credit card company, like Visa or MasterCard. It has the same type of account number and expiration date. But, again, no debt.

That presents an outstanding opportunity to save money, if you use the Internet to research prices from a lot of different merchants. The key to saving money online is to do a lot of comparison shopping. All too often, people end up paying more than they have to because they get caught up in the hype of online shopping. As a result, they shop at the best-known website without checking other sources and their prices.

On the other hand, if you use your computer as a tool to find the best possible price, then follow it up by making the purchase on a debit card, you get convenience and low price without adding any debt. And that's a good deal!

Another benefit of having a debit card is that it can also serve as your ATM card, which means you don't have to carry two cards. Just be careful to avoid surcharge fees, which can nickel and dime you to death.

One drawback to using a debit card is that you have to be very strict about keeping track of your receipts. Remember, every time you make a purchase on a debit card it's like writing a check for it. That means it's very easy to bounce a check, unless you have a handle on how much money you have in your account at all times.

Another more serious drawback is if the card is lost or stolen. Your checking account could be wiped out!. So notify your bank immediately if you think it has been lost or stolen.