Choosing Debit over Credit
If you want to escape the debt trap for once and for all then a debit card such as a Visa Debit might be the answer for you. Unlike a credit card there is no option to borrow money on a debit card so you can be guaranteed that you will live within your means and not build up heavy debts on your card.
The fundamental difference between credit cards and debit cards, also known as checking cards, is that the latter draw funds from your checking account. So you don’t run out of funds, relying on a debit card makes you keep track of your spending as you go and adjust your spending habits. With credit cards you can spend anywhere up to your credit limit without penalty, potentially racking up significant debts.
The debit card system offers some distinct advantages. The biggest benefit has to be using your debit card to handle your spending without falling into debt or getting shocked by monthly bills you can’t afford to repay. Visa debit has the same worldwide acceptance as Visa credit cards so it’s not limited in the way of many traditional debit card systems. Debit cards also give you easy access to cash via ATM’s and you won’t get hit with the charges and interest credit cards charge for a cash advance.
A further advantage is how easy debit cards are to get compared to credit cards. You don’t have to worry about lengthy application forms or your credit rating. Most of the banks have seriously tightened up their lending criteria for credit cards so debit cards are a great option.
With a Visa debit card you can enjoy all the advantages of a standard credit card without racking up crippling debts. For example, you can use a Visa debit card overseas, just as you can a Visa credit card. You still get the conveniences of doing things such as being able to shop online while controlling your spending.
While debit cards are a great way to avoid debt, they are not without their disadvantages. One potential pitfall of debit cards is overdrawing on your account. While they may look the same as a credit card they are not a source of credit so you need to ensure you stay within your spending limits and avoid any fees for going overdrawn.
When choosing a debit card you need to take time to compare the features of the bank account the card comes with. You should read the small print and be aware of all fees and charges, including annual charges and day-to-day banking charges, and factor these in when choosing a debit card.
Another common criticism of debit cards is that they do not offer the same consumer protection as credit cards. Many argue that if you are defrauded or are demanding a refund, you have a much better chance of getting your money back with a credit card.
While they are not perfect the advantages of debit cards far outweighs any negatives. Visa debit cards are easy to get, inexpensive if properly used and a great way to avoid debt.