Using a debit card payment has become an expensive popular resource and replacement for payments by check and credit card. The number of locations and situations in which these payments are possible are on the rise, and the advantages of a debit card payment make it an attractive alternative.
One is the fiscal responsibility of a 'pay as you go' model. With a credit card, each purchase creates a balance with the credit company that accrues interest until you pay it off. These payments is deducted directly from your bank account, so your balance immediately verify your purchases, and your bank-based budget is up to date. With no floating credit balance, you avoid accruing interest on your purchases, which also helps keep your budget on target.
Avoiding the drawn out process of writing checks and the hassle of keeping envelopes and stamps on hand is another advantage of debit card payment. With a debit card attached to your account, you can set up digital payments for many of your bills. As long as you make sure your account can cover your ongoing payments, it can be very convenient to have your bills taken care of automatically.
The Variety of Things of Covered by Debit Card Payments
As with credit cards, debit card payments are widely accepted for telephone and Internet purchases. Among the many things for which you can make a debit card payment are:
* Airline and railway reservations
* Hotel reservations
* Online shopping
* Payment of bills
* Payment of medical expenses.
* Gas stations
It's even possible now to pay your IRS tax return! Regular monthly bill payment is an especially convenient benefit of debit card payments, as is daily shopping. Many locations, from convenience stores to supermarkets, also offer the helpful option of getting cash back.
However, while swiping your card for larger purchases can be convenient, there are also risks.
The Dangers of Making Large Debit Card Payments
When making large purchases, many experts recommend using a credit card. If your purchase turns out to be faulty or unsatisfactory, it is harder to file a dispute over purchases that are made with a check card than for those made with credit cards.
With credit cards, you are protected under the Fair Credit Billing Act, a federal law which keeps you from having any liability for fraudulent purchases, poor-quality or damaged merchandise, or for merchandise that was never delivered.
With debit cards, there is no federal law providing you with liability protection – it's up to the individual company from whom you got the card. So if you plan to make a large payment, you should check carefully to find out what liability protection your card company offers.
Another problem is the same thing that makes them so appealing – the money is taken instantly out of your account. Unfortunately, this means a vendor may get your money long before you discover there's a problem with your purchase. You may then face an uphill battle to get your money back – whereas with a check, you may have time to call the bank to stop payment, and with a credit card, you can refuse to pay the balance until the dispute is settled.
The Risk of Fraud with Debit Card Payments
Another risk with making a lot of debit card payments is that it puts your card more frequently at risk of being "skimmed", stolen, or otherwise used fraudulently.