Free Debit Rewards

Debit Card Benefits and Usage

Debit cards are outpacing cash purchases. There are some reports that debit cards usages are even outpacing credit card purchases. It’s almost as if society has gone debit crazy! In these debit centric times, convenience and speed are fueling the increased usage of debit cards. In the prior economic boom when banks were willing to lend freely and consumers were more frivolous in their purchases, it was commonplace to have several credit cards in your wallets.

Not only was it common to have several credit cards, but it was common to charge purchases on all of them. If you were close to maxing out on one and interest rates were creeping up on you, you could always apply for a new credit card with a lower interest rate and transfer the balance to a credit card that had much lower interest rate. Things have since changed. The days of frivolous credit card purchases are a thing of the past. With banks tightening their lending standards and credit card interest rates skyrocketing, consumers have turned to their debit cards.  

Debit cards are very different than credit cards in the primary sense that a credit card purchase is a loan from the credit card company to you, allowing you instant gratification on whatever it was that you desired. The credit card company charges you a certain percentage annually and the amount is broken down into monthly payments. If you are on top of your payments, then the credit card company rewards you with a good credit score for your timely payments. If your credit card payments are late or you exceed the credit limit or simply have too much debt on all of your cards, you are punished with a poor credit score.

The poor credit score can cost you more than just the late fee penalties, but they can affect you in all aspects of your life, from buying a home, to buying a new car to getting a job. If you credit score is poor, that home that you want to mortgage or that car that you want to buy can cost you much more due to the higher interest rates that you will have to pay for being a poor credit risk. A poor credit score can now keep you from landing that dream job. If your credit score is below a certain level, it used to be just banks and other financial institutions, but now the number of types of companies that will turn you away due to a low credit score are on the rise.

This is where debit cards come into play. A debit card is not a loan and there are no interest fees to pay. With a debit card, you spend what you have. If you don’t have the money in your account, then you simply cannot purchase that item. A prepaid credit card is essentially a debit card. The difference with a prepaid credit card is that you buy a card with a predisposed amount on it. Once you’ve spent the limit on the card, then you can no longer use that card. Some prepaid credit card companies allow you to recharge you prepaid card and ask more funds back on it and with other you have to throw the empty used prepaid card away and purchase a new one.

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A regular debit card is issued by your bank and is usually connected to your checking account. Free debit cards are offered to new account holders and they provide a tremendous amount of convenience. Whatever amount that you have in your checking account is usually your limit. Some banks do offer overdraft protection on your debit cards, which at that point turns your debit card into a credit card, due to the overdraft fees, usage fees and other fee that your may charge you for providing you with that loan. A debit card purchase ensures that you only purchase what you can afford. If you can’t afford it, you simply don’t buy it.

This has been made more desirable in that most banks offer fraud protection for debit card transactions if they are noticed within a two days of the incident. With the advent of these new protections to consumers by banks, it is making the debit card even more attractive as a means of transactions. Debit card users can rejoice with these increased benefits for their debit card usage. Also, debit cards are extremely convenient. In the past we were used to carrying money around and having to run to the bank to get cash if we wanted to buy something.

Nowadays, a debit card is all we need to carry with us. It is fast, convenient and easy to use and gaining more traction each and every day. Debit cards also allow us to do away with having to carry change around. Every purchase is an exact purchase and the transactions are recorded in our monthly bank statements, which helps us to organize or expenditures and better manage the causes that our money is going to.

With more and more people using debit cards more and more frequently, debit card rewards are soon to emerge. While there are some banks that are already offering debit card rewards, some individual banks have already begun to offer debit rewards cards to their customers. These debit rewards cards offer free debit rewards to consumers for frequent usage and purchase of goods with their debit cards. In tough times when watching every dollar is important, no one wants to have to buy something and then pay high interest rates on the purchase, especially if they don’t have to. Debit card rewards programs are on the rise and there is no end in sight to how far they grow.

The major exception to this rule applies when making a large purchase. On some larger purchases, it sometimes makes sense to charge it on the credit card and pay off the balance over a longer period of time. Credit cards while unattractive, still offer certain benefits that debit cards do not. When you use a debit card to make a purchase, that transaction amount is immediately withdrawn from your checking account.

If there was some type of error and you are short of funds, you have to wait for the money to be returned to your checking account. This can cause a bit of stress if you don’t have much reserves in your account. In instances where a deposit is going to be held, for example when renting a car and sometimes when buy gas, you may find that it may take several days for the funds to be released back to into your account. For these and many other circumstances a credit card would be a much wiser option.

Before debit cards, it was more commonplace for customers to carry checks. The most annoying part is standing in line behind someone who was filling out a check. You might have been standing in a cash-out lane that was moving very quickly and just before you get to the teller, the person in front of you pulls out their checkbook. You can probably remember the face that you and everyone behind you makes when this happens. It’s like getting tackled on the 5 yard line as you were about to go in for a touchdown. This is not a very pleasant feeling.

Thanks to the popularity of debit cards this scene tends to play out much less frequently. Debit cards are here to stay and we may all be able to additionally benefit with new and better debit card reward offers for their usage. Debit craziness is a good thing especially if we all benefit from its use. Just remember that there will be times that cash and credit cards will trump the debit card, so don’t forget the cash and credit cards when you leave home.