Debit cards are one of the most popular ways of payment for most people since they are easy, quick, and secure. It has also reduced the need to carry cash because most places accept debit cards as payment. There are several benefits to using debit cards, and understanding them can allow you to make effective use of them. Continue reading to find out what you can do using your debit card vs cash.
Debit Card Definition
Money is deducted straight from the consumer’s bank account when a debit card is used. They are also known as “check cards” or “bank cards” and can be used to buy products or services, as well as to obtain cash from an ATM or a merchandiser who will allow you to add an additional amount to a buy.
A debit card is often a rectangle plastic card, similar to a credit card. It is linked to the user’s bank account. The quantity of money that may be spent with it is determined by the size of the account and the amount of money in it.
How do Debit Cards function?
Debit cards function as a hybrid of ATM cards and credit cards. You can use them to withdraw money from an ATM at a bank, as with the first, or to purchase items, like with the second. Indeed, many banking firms are substituting their standard, single-purpose ATM cards with debit cards provided by large card-payment operators such as Visa or Mastercard. These debit cards are included with your bank account.
Whether used to receive cash or make a purchase, the debit card works the same way: it immediately withdraws funds from the associated account. As a result, your spending is restricted to the funds in your bank account, and the actual quantity of funds you have to spend will change from day to day, together with your outstanding balance.
Advantages of having a Debit Card
With debit cards, individuals essentially buy stuff with money that they own rather than borrow funds on loan. However, they are far more secure than currency. Every transaction performed with a debit gets display on the bank holder’s monthly report, allowing the account owner to see where the money has gone easily.
And, unlike cash, a lost or stolen debit card may be notified to the bank, which can disable the card, delete any suspicious transactions from the cardholder’s bank, and provide a replacement card. There are various other advantages of having a debit card which is as follows:
- Rewards: Some banks provide incentives for using their debit card. You may earn and redeem points in the same manner that you would with a credit card. Furthermore, some retailers provide advantages for using certain debit cards while purchasing with them. You may earn points or receive products at lower prices or services.
- Accessible: The arrival of debit has simplified transactional methods. It is simple, and the payment is charged or deducted immediately from your account. As a result, you do not have to worry about whether or not the payment will be executed. Furthermore, you may use your debit card to take cash from an Atm, removing the requirement to visit your banks for withdrawing cash.
- Budget control: When you are using a debit card, the money is taken immediately from your bank account. Not only will you not incur debt as a result of using your debit card, but then you can simply keep a record of your expenditures to assist in planning.
- Safety: Debit cards include a default PIN (Personalized Identification Number) that you may alter. You would also get Sms alerts every time you complete a debit card transaction. You may also make payments online by providing a One-Time Password (OTP) delivered to your bank account’s connected cellphone number.
- Simple Utilization: One of the many advantages of having a debit card is that it is free when you create a checking account. You do not need to obtain a second debit card. The bank provides you with a welcome package that includes your debit card, PIN, internet banking information, and a chequebook. You can register your debit card and create a personal PIN at your bank’s ATM.
- Spending limits: Your debit card spending is restricted to the amount of cash you have in the account. With automatic payment, auto deposits, and Cash withdrawal, it might be difficult to recall how much money is in a bank card at any particular time, making using a debit card for purchases difficult. Your card may be refused, or you may be billed overdraft charges.
Debit Card vs Cash
In the post-pandemic age, online payments are fast increasing, with customers preferring Debit Cards the most. According to RBI data, 69.6 million debit cards were created between April 2020 and March 2021. While cash is vital in its own right, there are several situations in which utilizing a Debit Card is preferable to depending on cash. Aside from the simplicity of a Debit Card, there are also incentives and benefits.
Why Should You Use A Debit Card Instead Of Cash?
Here are some reasons why you should use a debit card instead of cash:
- Recovering from a setback: It is very hard to retrieve cash once it has been lost or stolen. However, in the case of debit cards, you may immediately call the bank to deactivate the card and receive a new one in less than a week. If you notice any suspicious transactions on your card, you must notify the card company as soon as possible. This may assist in limiting future losses. In fact, the RBI has advised customers to put transaction limitations on their credit cards for this same reason. Although tracking a Debit Card is considerably easier, it is preferable to ban it and obtain a new one simply.
- Online usage: In this day and age, where practically everything is done online, it isn’t easy to obtain fantastic offers and advantages only with cash. This is where your dazzling Debit Card comes in useful, allowing you to purchase online, make quick transactions, book tickets, and much more. Using your debit card, you can complete online transactions quickly.
- Keep a record of your expenditures: When you use a Debit Card, you will receive monthly statements that show your spending. This allows you to keep track of your spending patterns and develop an appropriate savings strategy based on your statements. Signing up for email/SMS notifications might help you keep track of your costs. Another smart habit is to scan your purchase receipts and save them in an expenditure monitoring software so you can reconcile them with your bank account later. With cash, you do not exactly track where you are spending your money, which can lead to mismanagement and losing track of your money.
- There is no need to carry cash: In the event of cash transactions, estimating how much money to carry on you might be difficult. You may easily come up short. Carrying about wads of money notes, on the other hand, is very inconvenient (and perhaps dangerous). A Debit Card makes life a lot easier, and it also keeps you from attracting unwanted attention.
To summarise, using a debit card is preferable to using cash in many cases. That is why having a Debit Card would come in helpful in many circumstances where money is not readily available. You can complete transactions quickly, shop online with ease, keep track of your spending, and find fantastic discounts and promotions.
With debit cards’ numerous benefits, you may enjoy a smooth banking experience without ever actually visiting the bank. Never expose your private debit card PIN to anybody to avoid fraudulent purchases. Also, review your bank statement each month, and if you discover any fraudulent activity, notify your bank right once.
The Fyp Card
Fyp relieves parents of the hassle of giving cash to their teens. It provides teens with an easy method to manage their costs while also teaching them financial responsibility. Teenagers can use the Fyp card through the Fyp app, to conduct transactions and maintain track of their spending. In addition, Fyp will teach the youngsters about money and keep their money secure with Bank Level security.
Because our educational system does not emphasize financial learning in kids at a young age, it takes years beyond school for an individual to manage money properly. Fyp is more than merely a neo bank for teens; it provides them with the necessary financial knowledge at the appropriate age. Moreover, it is wiser in today’s fast-paced, monetarily and technically expanding society.
The Fyp physical card does not contain any critical information, the app is password-protected, and the card can be quickly disabled if it is lost or damaged. Aside from that, the app allows the user to track transaction data. As a result, Fyp is a very secure method of managing money. Teenagers do not have to carry cash now and be at risk of losing money; instead, they can get their Fyp card and use it anywhere for making payments. This also gives their parents a sense of relief, and they do not have to worry about how and where their kids might be spending their money.
With Fyp, parents can give their young growing teens the power to manage their own money while also supervising their spending. This gives their kids a sense of responsibility that they are given along with independence to make their own choices. When they see their parents trusting them with their finances, they, in turn, act responsibly instead of making rash choices.
The conclusion is that debit cards are in more trend at this period, which merely carrying cash is not a smart way to go about it. Using the Fyp card, teens can become a part of this card revolution and be free from the hassle that come with carrying and using cash.