Visa Debit Cards: Using them to Avoid the Debt Trap
Thursday, August 20th, 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. Unlike a credit card there is no option to borrow money on a debit card so you can be guaranteed that you will live within your means and not build up heavy debts on your card.
One of the biggest differences between debit and credit cards is that with a debit card the money your spend is taken direct from your bank account. This means you are limited in your spending by how much you lodge to your account each month, forcing you to keep a close eye on 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. What is more, you are not limited in where or how you shop as you can use a Visa debit card anywhere you see the Visa logo. 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.
Another big plus with debit cards is that they are so easy to get. 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.
With a Visa debit card you can enjoy all the advantages of a standard credit card without racking up crippling debts. For example, you can use a Visa debit card overseas, just as you can a Visa credit card. 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. While they may look the same as a credit card they are not a source of credit so you need to ensure you stay within your spending limits and avoid any fees for going overdrawn.
When choosing a debit card you need to take time to compare the features of the bank account the card comes with. You should read the small print and be aware of all fees and charges, including annual charges and day-to-day banking charges, and factor these in when choosing a debit card.
Another common criticism of debit cards is that they do not offer the same consumer protection as credit cards. Many argue that if you are defrauded or are demanding a refund, you have a much better chance of getting your money back 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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