Debit cards and credit cards are the primary forms of payment in today’s day and age. In fact, according to a recent Gallup poll, about 6 in 10 adult Americans only make a few purchases or less each year in cash. That’s over half the population that likely does not carry cash on them at all times. It makes sense, then, that debit cards and credit cards are the primary choice for purchasing.
When it comes to debit cards and credit cards, it might seem like these are the same thing. They serve the same purpose—buying things with a piece of plastic that fits easily into your wallet. However, credit card companies will charge you interest on your unpaid balance, and that interest is often extremely high—somewhere around 20%. For comparison, student loans and home loans are usually around 5-6%. They can also hurt your credit if you carry a high balance.
If you don’t have a debit card already, it’s about time you got on the bandwagon. Not only are they an easy way to access your money, but you don’t have to worry about the extreme interest rates and the risk that comes with credit cards. Here are some reasons why 2023 is the year you should take the plunge and sign up for a debit card.
Debit cards put all of your funds at your fingertips when needed. Unlike credit cards, you don’t have any risk of falling into debt—you can only spend what you have in the bank. This is an easy way to pay your bills or make unexpected purchases without heading to the bank or filling out a check. Most things can be purchased with a debit card whether you’re shopping in-person or online, and with the ability to monitor your finances online, you can see exactly what you’re spending and where.
If you’re traveling internationally, your debit card also gives you easy access to your funds without the extra steps of exchanging currency at a bank or airport machine. This also means no foreign transaction fees for you, just more money you can spend on enjoying yourself. Just be sure to call your bank or credit union ahead of time to alert them of the travel—you don’t want your transactions to be flagged as fraudulent.
Having a debit card is usually 100% free. Some financial institutions have a monthly or yearly fee for opening a checking account, but adding a debit card to an already existing checking account will most often come at no extra charge to you. Plenty of checking accounts are free as well, or will waive the fees if you maintain a certain minimum balance on your account or receive direct deposit from your employer.
If your cash gets stolen, it’s pretty unlikely that you’re getting it back. Whether you drop your wallet or experience a break-in, there’s always a risk to carrying cash on your person or in your house. It also can’t be traced back to you—once a $20 bill flies out of your pocket into the wind, it’s probably gone forever.
With a debit card, you can sleep tight knowing your funds are secured and being monitored for fraudulent activity anytime money is spent or transferred from the account. Financial institutions have gotten very good at tracking your spending habits and noticing things out of the ordinary, such as unexpected international purchases (as mentioned above) or large sums that are not part of your monthly routine. If money is taken out of your account fraudulently, an investigation will take place and your money will be returned to you once the scam has been recognized, giving you the peace of mind you deserve.