PERSONAL FINANCE MANAGEMENT

Best practices for using your debit card

When you use a debit card you don’t have to worry about carrying enough money with you, but that’s not the only advantage these plastics have. Here’s how to take advantage of them.

1. Goodbye debt

With a debit card it is impossible for you to get into debt, because when you make a purchase or withdraw cash from an ATM, the money is withdrawn directly from your account, in case there is enough money, otherwise the operation cannot be done.

Real-time payment makes you responsible for not spending more than you actually have.

2. Your money under control

Just as debit cards make you responsible for spending responsibly, they also make it easier to stick to a budget and resist overspending. Instant payments let you know how much money you really have left.

Plus, you can have exact information on how and what you’re spending. For example, with the new debit card, you can monitor your movements in real time and at the end of the month know in which categories you spent the most.

3. Security

If you’ve ever been robbed or stolen, you know that the cash you carry in your wallet is money lost forever, but with debit cards it’s not the same. In case of theft or loss, you can report it to cancel it and avoid losing your funds. Virtually all financial institutions protect your debit account balance through insurance. Find out how this backup applies at the institution where you have your card.

Another plus point is the recent addition of chips to these plastics, which offer more protection. Some debit cards also offer the option of making your purchases online with a virtual card with every purchase.

4. Cards that generate yields

Some financial institutions offer multiple types of savings or investment accounts that generate returns on your average balance. Usually a minimum daily balance is required, but in return you get the benefit of earning extra cash and the convenience of using a debit card to make purchases and withdraw cash.

5. It opens the door to credit

If you don’t have access to a credit card yet, handling a debit card is the first step, because it is the way financial institutions can observe your savings capacity, your monthly income and your spending behavior. It is likely that after handling your debit card for some time, you will receive an invitation to apply for a credit card.

6. Promotions

There are stores that offer you discounts when paying in cash. Since debit cards work just like cash, the same applies.

As you can see, debit cards have advantages that cash will never give you.

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