Credit cards are getting so much negative feedback because of the fact that so many consumers are suffering from the debts that have accumulated because of it. The whole concept of this card is to allow consumers to purchase items that they cannot afford at present. They are allowed to pay for it using a future income that has the possibility of not arriving. If it is compromised, the consumer is left with a high interest debt that can end up ruining their financial stability.
This is why debit cards are starting to be a popular alternative for cashless purchases. Some people think that by eliminating credit cards, they are saving themselves from potential debt.
While this may be true, it is only right that you find out what you can about debit cards before really using them.
The benefit of debit cards is the fact that it allows you to purchase items without carrying cash. This is much more safe. When you lose your cash, it is gone for good. If you lose your debit card, you can simply inform the card company so they can freeze the account so it will not be used by the person who got hold of it.
The safety is also for the debt that you will not acquire. Unlike credit cards that rely on future income for payment, you have to deposit money into your debit card before you can use it. When it runs out, you don’t have to worry about overspending. You cannot spend more than what you have deposited into your account. It supports the practice of living within your means.
Most retail stores also give reward points for the use of these cards. These points can be exchanged for products and freebies. Sometimes, it can be used to purchase more products. Some of the popular stores have their own debit cards that you can use and stock up points.
However, all of the benefits do not really answer the question of debt freedom. Will it help maintain a debt free life?
First of all, you need to get out of debt first. If your credit card got you into debt, you have to pay it off to achieve debt freedom. You have several options but if you wish to maintain a good credit score as you pay off what you owe, you may want to use debt consolidation. Once you have paid it off, make the decision to cancel your credit cards. You can choose to have only one credit card or to get rid of them all and use only debit cards from now on. A combination may be good for you too.
Once you are debt free, maintaining them is easier if you have debit cards. Since these cards will not let you overspend, you don’t have to worry about going over budget. You just have to make sure that you put in the right amount into your card.
One piece of warning, make sure you understand the fees involved in debit cards. There are certain fees that you have to pay for when you make any transaction. You need to understand the fine prints before you sign up to anything. Not only that, make sure the account where you will put your debit card money is FDIC insured – just in case.