Visa Debit Cards: Using them to Avoid the Debt Trap
Thursday, August 6th, 2009 Subscribe To Our Feed
If you want to escape the debt trap for once and for all then a Visa debit card might be the answer for you. Credit cards allow you to live beyond your means and spiral into debts you struggle to pay back; debit cards force you to live within your means by only allowing you access to money you have already.
The fundamental difference between credit cards and debit cards, also known as checking cards, is that the latter draw funds from your checking account. So you don’t run out of funds, relying on a debit card makes you keep track of your spending as you go and adjust your spending habits. With a credit card you can spend anywhere up to your credit limit without penalty, potentially racking up significant debts.
The debit card system offers some distinct advantages. Chief among these is that you can use your debit card for everyday spending without falling into debt, or having to worry about interest rates and monthly bills. Visa debit has the same worldwide acceptance as Visa credit cards so it’s not limited in the way of many traditional debit card systems. Debit cards also give you easy access to cash via ATM’s and you won’t get hit with the charges and interest credit cards charge for a cash advance.
A further advantage is how easy debit cards are to get compared to credit cards. You don’t have to worry about lengthy application forms or your credit rating. In the current economic climate it can be difficult to get approval on credit cards, so a debit card is an excellent alternative.
Visa debit still has all the positive advantages of a credit card but without the risk of getting into debt. For example, you can use a Visa debit card overseas, just as you can with Visa credit cards. You still get the conveniences of doing things such as being able to shop online while controlling your spending.
While debit cards are a great way to avoid debt, they are not without their disadvantages. One potential pitfall of debit cards is overdrawing on your account. They are not designed as a source of credit and the fees for overdrawing can be expensive, so you need to make sure that you stay within your budget.
When choosing a debit card you need to take time to compare the features of the bank account the card comes with. Although there may be no interest charges you need to look at any other fees and charges associated with the banking account your debit card will come with.
Another common criticism of debit cards is that they do not offer the same consumer protection as credit cards. The usual argument on this would be to say you have a much better chance of demanding a refund or avoiding paying the costs of fraudulent use with a credit card.
However, considering the convenience and advantages that debit cards offer, these are minor criticisms. Visa debit cards are easy to get, inexpensive if properly used and a great way to avoid debt.
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