Debit cards are one of the most popular forms of payment in this day and age. In fact, 87% of Americans own a debit card and use one to make payments both in-person and online. If you’re thinking about getting a debit card, it’s important to consider the pros and cons of debit cards so you can make the best decision for your finances. Let’s explore some of the advantages and disadvantages of committing to a debit card.

Pros of Debit Cards

1. Easy to Track Expenses

The top reason Americans say they pay with a debit card is that it is easier to keep track of their expenses. When you pay for something with a debit card, you can track your payments in real-time. Debit card transactions immediately take money directly out of your bank account, so you can monitor your spending through your online account. 

2. Convenient to Use

Debit cards are simple and easy to use. Instead of having to hassle with counting coins and dollar bills, you just swipe your card or hand it to a cashier to make a payment. If you don’t want to always keep cash or checks on hand or don’t want to solely rely on credit cards to make payments, a debit card is a great option.

3. No Annual Fees

When considering the pros and cons of debit cards, one of the major advantages of debit cards is that they don’t charge annual fees. Unlike credit cards, the standard debit card only requires a checking account to work. You aren’t required to pay maintenance fees or annual charges. Debit cards also let you get cash for free from ATMs affiliated with your credit union.

4. Quick to Get

While poor credit history may prevent someone from getting a credit card, a debit card requires no well-established credit history or a high credit score to have one. All you need is a checking or savings account to link your debit card to.

Cons of Debit Cards

1. Don’t Positively Impact Your Credit Score

Unlike credit cards, debit cards don’t help you build your credit score. However, if you have a negative checking account balance or overdraft on your account, this could impact your credit score. Before making a purchase with a debit card, know how much you have in your account and see if you can afford the purchase.

2. Potential Overdraft Fees

Since debit cards pull money automatically from your account when you make a purchase, it’s important to keep track of how much money you have in your account. If you don’t have enough money in your account to support a purchase, you could be charged with an overdraft or insufficient fund fee. These can cost up to $35. Your credit union will give you the option to opt-in or out of overdraft protection services, so choose the option that fits your finances the best. It can be easy to spend more than you have, so keep an eye on your account and track your current balance before making a purchase.

 3. Potential decline by the merchant

If you do not sign up for the overdraft protection services with your credit union, you only have access to the actual funds in your account.  That means if you attempt to make a purchase for more than the amount in your account, your purchase will be declined by the merchant. This can be uncomfortable to experience, especially if you do not have another payment method on hand to make a purchase. Speak to a Vocal Credit Union representative today to learn more about how you can opt-in for overdraft protection services.

Ready to get a debit card? Chat with one of our representatives at Vocal Credit Union. Our Vocal Credit Union debit cards have no annual or monthly service fees, so you can use your debit card without worrying about extra payments. To get your debit card today or discuss the pros and cons of debit cards with one of our team members, give us a call at 406.442.1421.