A week ago, in our blog, we listed a few of the main reasons most of your customers prefer using their credit cards over cash when shopping. One driving theme throughout each reason is convenience. Simply put, using plastic to pay for purchases makes life a lot easier than using cash. And while credit cards offer numerous benefits, debit cards are right up there in the “providing convenience” department.
Just like credit cards, debit cards can be replaced if lost or stolen, absolving their users from any responsibility for fraudulent charges. However, debit cards offer your customers many other perks that credit cards do not.
As you’re aware, credit cards enable shoppers to make purchases for items they not yet have the money for. With a credit card, a shopper is given the ability to pay his/her balance off over time. By doing so, interest charges are accrued. Debit cards, however, only allow shoppers to spend up to the amount of money they have in their chequing accounts. As a result, it is impossible to owe any balances or accrue any interest.
“For many, the appeal of debit cards is that you don’t go into debt when using them,” writes Justin Pritchard on TheBalance.com, “They limit spending to what’s available in your checking account. Your card will just stop working when you run out of money unless you sign up for optional overdraft protection, which is helpful if you have a hard time controlling your spending.”
As mentioned, debit cards help their users to avoid fees such as interest charges. However, they also cost nothing to use, in general. While many credit cards offer rewards programs and a host of other benefits, they also come with annual fees. Debit card users are free to go shopping without the worry of having anything extra to pay for other than their purchases. There are no annual fees or interest charges on a debit card.
“Frugal consumers may prefer to use debit cards because there usually are few or no associated fees, unless users spend more than they have in their account and incur an overdraft fee,” writes Mark P. Cussen on Investopedia.com, “Credit cards generally charge annual fees, over-limit fees, late-payment fees and a plethora of other penalties, in addition to monthly interest on the card’s outstanding balance.”
For some consumers, getting a credit card can be difficult. It’s important, of course, to maintain a good credit score by proving you’re capable of repaying loans. When applying for a credit card, one must disclose his/her income as well. A debit card, on the other hand, is incredibly easy to attain. As long as you have a chequing account at a bank, you can get a debit card. When you use that debit card, you’re using the money in that account. It’s all very simple.
“Debit cards are easier to get if you have bad (or no) credit,” assures Pritchard, “If you can get a checking account, you can get a debit card. Whether you don’t like the idea of debt or you can’t get approved for debt products, debit cards let you steer clear of credit cards.”
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