As good as a debit card can be, with it comes responsibilities. Some people can be very irresponsible when they have a credit card, or even a debit card. Here are some reasons to avoid using a debit card.
You can’t see how much money you have like you can with cash
A debit card is a tool to hold money so you don’t have to carry all of your cash. However, since you aren’t carrying your cash, you can’t see how much you actually have. You can either go online and check your balance or call your card service provider, but sometimes that can be a hassle. More often than not people guess at their balance, which leads into the next point.
It is easier to overdraft
For those looking to get a debit card, overdrafting is charging more money to your debit card than you have in your account. Usually, your bank will have an overdraft fee, which means that they will pay for what you charged over, but they will charge you a fee each time you overdraft. It’s generally not a big sum, (some places charge $25), but if you are overdrafting several times each month, it can add up.
There are fees associated with a debit card besides overdraft fees
Banking institutions will sometimes add fees for using the card. Some places will charge a monthly fee for simply owning the card. Others will require a minimum balance in the account, with fees if the balance drops below that. To check your balance at an ATM, or automated teller machine, usually costs a fee. ATMs will also charge fees for withdrawing money as well.
You are responsible for more when it comes to fraudulent activity
As with credit cards, if a debit card is stolen and used fraudulently, the bank will cover anything over a certain amount, which is the owner’s responsibility. However, with a debit card, because the funds are transferred immediately, the owner of the card has a much shorter time frame to report it. If you don’t report suspected activity within that time frame (usually two days), you may be liable for hundreds of dollars of fraudulent spending.
There are many disadvantages to using a debit card, if you are not careful. To avoid these, inform yourself about your bank’s policies, and be sure to know your balance and any possible fees you may be charged for something you do.