Debit cards are used to access money that is available in a checking account, from an ATM machine or by making purchases.
There are different types of debit cards with different terms and conditions and you should choose the card that best suit your budget and spendinging habits.
You can choose a card with a revolving line of credit. These cards are attached to the equity in your home or the money in your retirement account. This type of debit card enable you to spend money that is not already in your checking account.
Be careful because using this type of card can quickly deplete a large portion of your financial security and they are not meant for someone who has no control over their spending.
Debit cards have quickly taken over as the preferred way to shop and to pay bills. Credit cards are no longer the number one choice for consumers and shoppers. 70 percent of card holders own a debit card and they use them more than 53 percent of the time, to make purchases, every month.
The ease of use of a debit card, in addition to no interest rates and the assurance that the purchases are paid in full, has turned more people toward this payment type.
Popular Debit Card Issuers
Bank of America
PNC Financial Services Group
In 2009, Americans used their debit cards more often than they used cash, credit cards or checks. In one year, the use of debit cards increased by more than 22 percent.
When a purchase is made with a debit card, the money used to pay for the items is instantly taken from the checking account of the card owner. This help to prevent over-spending and a lot of impulse shopping, unless the card is covered with expensive over-draft protection.
This protection is available to card holders who are in good standing with the card issuer. Over-draft protection can amount to up to $500.00 or more, depending on your credit score.
This means the you can make a purchase for up to $500.00 over the amount of money in your checking account. Every purchase made over the actual amount in the checking account is hit with a hefty fee that can amount to $40.00, or more per over-draft, depending on the card issuers terms and conditions.
If you use your debit card at an ATM machine to get cash, you may be charged a fee that is in addition to any fees charged by your bank ”and” there is a limit to the amount you can withdraw in any 24 hour period.
You should be aware that every ATM withdrawal is subject to extra fees and these are greatest when you use your debit card and your signature is ”’not” required. There is also an additional cost to use your VISA and MasterCard debit cards and this fee can be from 0.417% to 0.325% of the purchase price.
There are prepaid debit cards that allow you to put your money directly on the card through direct deposit. Some prepaid cards have no overdraft fees and your money from your paycheck will show on some prepaid cards up to three days earlier than your actual payday.
Interestingg facts about debit cards
Debit cards are used more than credit cards.
You could be charged up to $500.00 if someone use your debit card. Even if it is stolen.
Banks make more money from debit cards.
VISA has 382 million debit cards in circulation.
71 percent of Americans between 18 to 24 years of age use a debit card.