In 2024, nearly 30% of all consumer payments in the US were made using a debit card. This indicates that a significant portion of the population utilized debit cards.
Here are six factors that make debit cards a popular choice:
- They are Interest-free
Unlike credit cards, debit cards do not charge interest on purchases. The payment is deducted directly from your checking account, so there is no borrowing involved. As a result, you don’t have to pay a bill or clear any outstanding balance by the end of a month.
For efficient debit card management, read your bank’s overdraft policy and check your balance before making a larger-than-usual payment. This will help you avoid an overdraft fee and interest.
- They are Excellent for Budget Control
When you use a credit card, you’re borrowing from your bank. Payments can quickly pile up, leading to overspending. With a debit card, you can only spend what you already have in your bank account. This helps you limit spending and stick to a budget.
- Debit Cards Keep Records
Debit cards can help you stay on track with your financial goals. The date, time, and location of each of your purchases are mentioned on your bank’s mobile application. The transaction history is updated almost instantly, keeping you aware at all times.
You can also turn on message alerts for debit card spending. With efficient record-keeping features, cash cards encourage thoughtful spending.
- Debit Cards Have Robust Security Features
With the advent of electronic transactions, the risk of cyber crimes has significantly increased. Debit cards have a range of security features to keep your money safe and prevent fraud. This includes:
Microchips: Debit cards feature a small computer chip that stores and encrypts transaction data. When you make a purchase, the microchip verifies your identity and approves the transaction. These are more secure than magnetic stripe cards.
PIN: Learn how to read your 16-digit debit card number on SoFi as well as your 4-digit PIN. The PIN is a unique code used to verify the cardholder’s identity. The PIN is required for ATM withdrawals and sometimes for purchases.
CVV: A CVV, or Card Verification Value, is a three or 4-digit number printed on the back of your cash card. You will be asked to enter the CVV while making an online purchase.
- They are Widely Accepted
Carrying cash, especially when you’re traveling, is not feasible. Most retailers, venues, and other service providers accept cash cards. Most debit cards are linked with a processing network, such as Visa or Mastercard, making them safe for transactions.
Many vendors now prefer cashless payments, which makes debit cards a must-have. If not, you can quickly withdraw money from a nearby ATM and forget worrying about cash.
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- They can be Integrated into Digital Apps
For maximum convenience, you can save your debit card information on a digital wallet, such as Apple Pay or Google Pay. The mobile application would create a secure online version of your debit card, protecting your sensitive information during transactions.
