Is it bad to use a debit card?

Question

I was just checking out someone else's question about "how to save money", and I noticed that one answer said that you shouldnt use a debit card when paying for things in a store. Why is that? I'm a little nervous, because I do it all the time!!

Answer 1

No, that's wrong. No problem using a debit card as long as you keep track of what you spend. The only time it becomes a problem is if you forget to record a purchase you made with your debit card and your account becomes overdrawn as a result. Being diligent about recording all your purchases in your ledger will keep that from being a problem.

Answer 2

There is some concern because the rules on getting your money back on card fraud are a little different with debit cards. However, this is currently changing as more and more people use debit cards.

Another thing I have heard is that it is harder to reverse a charge on a debit card. Lets say you pay for a service from a company and the company does not give you the service. With a credit card, you can contact the credit card company and reverse the charge. The company that provided the service will then need to prove to the credit card company that the charge was for a valid service or product that was delivered. I have heard that this is harder to do with a debit card.

I have heard that shopping online with a debit card is riskier than shopping with a credit card because of the above stuff I mentioned. However, for normal shopping, I have never had a problem and I have never known anyone who had a problem.

I do know of one reason why using a debit card can lead to saving less money. It becomes easier to spend your savings. The debit card is attached to the checking account. Most banks will tap from the savings account if the checking cannot handle it. You go out and see something that you want but do not need. You have the entire purchasing power of your checking account and savings account (and maybe even overdraft protection) to buy the item. You can easily wipe out your savings. What is probably more realistic is you spending a lot on little things that you do not need. The little purchases quickly zap your accounts. Of course, this can happen with a credit card as well. The person was probably wanting you to go to a cash only basis. By spending actual cash, you can get a better idea of what you are spending.

A however on that though. What cash cannot give you is the ability to easily track your purchases. With a debit or credit card, you get a statement every month that tells you the what, when, where, and how much of your purchases. In fact, you can usually go online and get this information even faster. With cash, you would need to keep a notebook and/or gather receipts. That system is cumbersome and stops working the second you forget to make an entry or cannot get a receipt. There are pros and cons to each system. I personally use the debit card. However, I know people who go with a cash basis and have no problem. I guess use whichever you are comfortable with as long as you have a control on your spending.

Answer 3

As long as you think of it as a check, and record it like you would if you wrote a check, then I don't see the problem. I use mine all the time. I check my statement online several times a week and when I get close to being out of money, I either leave the card at home or something. For me it helps me see where my money is, and see that it has cleared the bank. Whereas with a check, it moves through so many different hands before it even gets to the bank that I feel like I'm just asking for someone to steal my identity.

Concerning the persons answer above me, I use mine all the time and there's only one or maybe two places in town that actually charge me a transaction fee to use it. One place is a competing bank's ATM (and honestly, why would I use a copeting bank's ATM?), and the second I don't really no of, but there may be some place out there that does. Wal-Mart used to but that was quickly resolved and they don't do that anymore. I've noticed that early on, even places like McDonald's would ask if it was a debit or credit card, and if I said debit, then they would hand me the key pad to punch in my four digit code, but now they don't. I think what happened was that some sort of agreement was reached between businesses and banks that basically says that a business treats all cards as credit cards, and the company is the bank. So that the bank automatically takes the transaction and debits it from your account.

Answer 4

Pros & cons. Pretty much the most difference is that a credit card is using somebody else's money interest-free for 30 days (if you pay your card each month in full). With a debit card, you're using your own money immediately. On the other hand, if an emergency comes up toward the end of the month, you don't have to worry about paying off a credit card since your debit card has already deducted the money from your account.

There have been, for many years, laws which protect consumers who use credit cards. Erroneous charges, warranty issues, and even card theft is very advantageous to the card holder. Debit card protections, are minimal and can change at almost any time.

Debit cards do not require good credit to receive and use. On the other hand, debit card usage does nothing to improve your credit score (NOR hurt it, just so we're straight on that). Debit card usage offers only the convenience of payment, similar to credit cards.

When using a debit card, clerks will ask if you want to treat it like a credit card or debit card. As a credit card, the merchant pays any fees, just as the do with all credit cards. Prices these days already include this cost of business, whether you use it or not. So you might as well use it.

Because, if you say debit card, YOU will pay a fee for the debit card usage, typically $1.50 - $2.50 for each and every transaction, depending upon your bank.

Right now, debit card protections are somewhat decent. A lot better than using cash, easier than writing checks, but much less safe than by using credit cards. All in all, though, don't be nervous about using your debit card. Just exercise the same caution that you would use with your checkbook.

Answer 5

As long as you don't overdraw your account, use of a debit card is fine.

Some of the laws giving protections if a credit card is stolen don't apply to debit cards - maybe that's what they were talking about.

Answer 6

its not bad so long as you pay the money back on time. having one of those cards and paying on time looks really good on your credit. overspending is a big problem. only spend what you know you will be able to pay back. and its usually good not to have more then one open cuz then you get all these bills and it may be hard to keep up with them

Answer 7

I think they said that because it doesn't seem like realy money, but trust me....every time I check the balance in my account it seems like real money as it disappears!

Answer 8

I use mine all the time. I have no problem with it at all.
Don't be nervous if you haven't had any problems with it.