Debit cards, credit cards, and fraud: how to navigate the world of banking with debit.
What is a debit card?
Simply put, debit cards are used to make payments by withdrawing money from your checking account. They are convenient in the sense that they replace the need to always carry cash or cheques with you. You would use a debit card like you would with cash or cheques. However, there may be a monthly spending limit that you should watch out for so as to not incur any extra fees. You could also be charged by using your debit card if you withdraw money from an ATM that is not affiliated with your bank.
Credit vs Debit
A credit card is also issued by a bank, but unlike debit, it allows you to essentially borrow money from the bank to make purchases, which you will have to pay back monthly, along with any additional fees or interest. Debit cards, on the other hand, only withdraw money that you have in your checking account, so they do not allow you to go into debt. Because of this, it is much easier to track your spending and your money with debit cards. While debit cards won’t build your credit score, they are a good way to make purchases all the same.
Debit card fraud
Debit card fraud occurs when someone steals your debit card PIN or information to make purchases on your name from your account without your permission. This is one of the drawbacks of having a debit card, as it does not offer the same fraud protection as credit cards do, and this is something to watch out for. With any kind of fraud, it is very important to report it to your bank as soon as possible so that you will not be held responsible in any way for the situation. This actually happened to me once, but thankfully I reported the issue right away and my bank was able to handle the situation.
I’ll never forget the thrill of depositing my first check on my debit card. If you have any kind of job or have any money that you want to put in account, or if you’re below the age of 18, a debit card is a great place to start managing your money. You will be able to save money, and make purchases whenever you like, all the while developing responsible spending and money managing habits.