by Katerina Nikolas

Created on: May 30, 2011   Last Updated: May 31, 2011

In many countries debit cards are the preferred method of payment alongside cash, but it is only in the last few years that debit card use has overtaken credit card use in North America. Consumers have finally caught on to the advantages of debit card transactions after experiencing the drawbacks of credit cards, which have led many to live beyond their means, and then suffer the consequences.

Debit cards were originally introduced as a less expensive option to checks, as processing costs are less. The convenience was immediately apparent as consumers no longer had to carry a bulky check book on their shopping expeditions, nor delay the queue at the point of sale whilst checks were filled in and signed. For those who still preferred to use checks for retail purchases the debit card doubled up as a check guarantee card. Debit cards also negate the necessity of carrying large amounts of cash or keeping an emergency fund in the home.

Using debit cards ensure consumers live within their means. Funds are directly debited from ones checking account when a purchase is made, a bill is paid, or when cash is withdrawn. Unlike credit cards there is no fee to withdraw cash from ATM’s unless a machine is used that has no affiliation with ones own bank. It is a simple matter to find out which banks offer free usage of their ATM’s, in addition to ones own bank.

As ATM transactions are not always too safe due to the location of machines or the prevalence of scammers, the wonderful thing about debit cards is they also allow free cash withdrawals when purchases are made. It is a simple matter to pay for ones groceries with a debit card and at the same time request a cash withdrawal. Debit cards can also be used for telephone and internet payments.

Using debit cards means there is no bill to pay at the end of the month, no risk of late payment charges, and no interest charged. Consumers can only spend the funds in their bank account or additional funds from an authorized overdraft. The drawback for those used to earning credit card cash backs or reward programs is that debit card rewards schemes are being reduced. Those prepared to shop around though could benefit from opening a Perk Street Financial checking account as the debit card offers an appealing two percent cash back.

Many people are now turning their backs on credit card use after running up debts which proved difficult to reduce, with the reality of ever increasing interest charges. Debit cards linked to ones bank account preclude the totally unnecssary costs associated with prepaid debit cards. Debit cards are the perfect tool for those who have difficulty restraining their credit card use and appreciate the advantages of living within their means. Using debit cards ensures the consumer is in control of their finances and avoids a nasty surprise at the month end when the statement arrives.

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