How to get a Debit Card

Carrying cash can be so troublesome in today’s globalised society. The rise in credit card use over the years can largely be contributed to the convenience factor, whereas a simple swipe will do. No running low on cash, no needing to count out the exact amount (for the customer or the cashier) and no worries if you lose your wallet (just cancel the card). The problem with this, however, is that using credit has become too easy and people rely on their plastic like a lifeline to the ultimate consumer fantasy: buying whatever you want, whenever you want it. Luckily, aside from the outrageous debt stories you read online or hear on the news, most people tend to spend relatively within their budget. If you have a poor (or no) credit history or an unstable working situation, however, even getting a low monthly limit credit card can be difficult.

So if you want the convenience of plastic but don’t quality for a credit card, what’s a person to do? Get a debit card, of course.

What Is A Debit Card?

First and foremost, what is a debit card and how does it function? It works just like a credit card, except it is limited to the amount of available funds you have in the bank. Instead of a monthly balance to pay off (plus the potential for going over your funds allotted for the month), your budget is equal or less than your income. This ensures that you live within your means and don’t rack up piles of debt (much easier to spend impulsively when you know you don’t really have a limit, as with credit cards).

Finding A Provider

Most major banks around the world offer a debit card bundle with customers who open a cheque and/or savings account with them. These allow you to withdraw money from ATMs at their branches worldwide without a fee (fees are imposed at non-branch ATM’s) and use these cards in the same way you’d use them as a credit card in a store (except you use a pin number for security reasons).

Not all debit cards come from banks, of course, and each one—regardless of where you get it—comes with its own rules, fees, and stipulations. When applying for a debit card, it is crucial that you read at least the bolded parts of the fine print, if not all of the terms and conditions that are stated within. This will prevent any unhappy surprises from popping up later on, as you’ll be well-informed about most, if not all, aspects of your card.

If travelling abroad, consider applying for an international debit card. Not all cards are accepted universally, and even if they are (VISA is the most popular debit card, globally speaking), there are many fees attached to international transactions that can end up costing you a lot more than the transaction itself was worth. An international debit card, however, can prevent these excessive fees and potentially get you more favourable rates on different currency withdrawals (keep in mind: the actual currency exchange rate is always lower than the currency exchange rate that a bank or exchange company will charge you).

Benefits And Pitfalls

Debit cards encompass the best of both worlds: not only will you spend within your means, but you will still retain the same ease of use as a credit card. The monthly use fee is often very minimal, as are the transaction fees associated with these cards (though of course, this depends on the actual debit card in question, as fee amounts range widely from card provider to card provider). International transaction fees are also lower (even lower if you get a debit card specifically targeted at the country you will be visiting).

As with anything in life, there are obviously going to be some disappointments when using debit cards. For one, they don’t help to build up your credit, nor do they allow for cash advances for bigger purchases that are outside the parameters of your budget (unless your bank actually offers this program; check with your local branch for further information). Debit cards are also considered less secure than credit cards, as someone who has your pin number can withdraw as much as they want and once the money’s spent, you generally can’t go back and contest a fraudulent purchase as you can with a credit card. Still, as long as you protect your information, there shouldn’t be much of a problem with using a debit card as your primary source of cash.

Overall, the advantages definitely outweigh the disadvantages when it comes to debit cards.

The Debit Vs. Credit Debate

Alas, we must also confront the never-ending debate over whether debit cards are better than credit cards. While each has its own merits, debit is the way to go if you want to have more security in your saving and spending habits. It’s impossible to overspend with a debit card, because it is directly linked to your bank account and the funding deposited within (although the possibility for overdraft fees is always there…the fact remains that it is still more difficult to go on wild spending sprees). Debit cards also don’t have interest tacked onto them, which really adds up over time for credit card owners if the balance isn’t paid off at the end of each month. And while there is usually a monthly use fee, it is likely to be less over a twelve month timeframe in comparison to the annual fees charged by credit cards.

A few downsides to debit cards include: no rewards programs, inability to build or improve credit score, potential to incur overdraft fees, and limitations in regards to how much you’re allowed to spend. It’s also advised that you don’t use your debit card online, for security reasons (this alone often makes people opt for a credit card over debit).

When it comes to getting a debit card, acquiring one isn’t the hard part: restraining your spending habits in accordance to the rules of your new card is. Although it looks and feels just like a credit card, debit cards are tied to your bank account, not the good faith from a contract stating that you are obliged to pay off the given balance (minimum or all) each month. If you are unable to qualify for a credit card for whatever reason, debit cards can certainly be useful tools to have in your wallet, so long as you remember to use them wisely.

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