![]() If your card is stolen the thief may be able to drain your account before you or the bank/credit union are aware of it. In this case, an overdraft fee of $34 means you’re paying 17,000% interest on a three-day loan.Īnother drawback of debit cards is that they provide limited fraud protection. Most overdraft fees are the result of purchases of $24 or less and are paid within three days. In this case, the bank/credit union will hit you with a hefty $34 fee each time you overdraft, plus you’ll need to pay the negative balance in your account. Most banks/credit unions will clear purchases up to a certain amount even if you don’t have sufficient funds (called overdrafting), leaving a negative balance in your account. While debit cards encourage you to spend within your means because funds come from an account with money you already have, there are some drawbacks to consider.įirst, debit cards are not foolproof to ensure you spend within your means. This means that you are using the money you already have to make your purchases and you’re far less likely to make unnecessary purchases or spend beyond your means. The major benefit of a debit card is that money from your purchases comes directly out of your account. ![]() Now, you can use your debit card and the money is similarly deducted in a few days, although you’ll likely see a pending transaction notice for your purchases. In a few days, the check would clear and the money would be deducted from your bank account. In the old days (like 15 years ago), people would write a check and then track that expenditure in their checkbook so they knew how much money was left in the account (some more seasoned individuals still do this, like my grandma). For the rest of you, debit cards allow you to pay for purchases with money directly from your bank account. Debit Cardsįor our more seasoned readers, debit cards have replaced your old checkbook. The following paragraphs will discuss the major differences between a debit and a credit card, as well as which one may be right for you. On the flip side, while you don’t hear about debit card debt, they also carry some drawbacks you need to be aware of. In fact, households with a credit card carry an average of $8,398 in credit card debt. You’ve probably heard about the issue of consumer debt in this country, which includes a great deal of credit card debt. What’s the difference between a debit and a credit card?Īlthough both debit and credit cards are common financial tools used to make purchases, the differences between them and the potential impact to your finances may not be as clear.
0 Comments
Leave a Reply. |
AuthorWrite something about yourself. No need to be fancy, just an overview. ArchivesCategories |