Could you even cancel that credit card altogether?
Let’s face it, easy access to credit is extraordinarily handy and credit cards provide us with instant access to a line of credit.
Credit is useful. It allows us to juggle cash flows, to make purchases when we need to rather than when our pay checks come in. But for some of us instant access to credit can be a problem, either because we just can’t resist that new bargain, or because we’re struggling to make ends meet. Either way, instant credit is like fire: “a wonderful slave but a terrible master”.
If credit cards are a problem for you, could you get by with a debit card instead?
Debit cards access the Visa or MasterCard networks to offer all the convenience of making payments with a card… minus the debt. So when you use a debit card, it takes money from your account to pay for purchases.
Debit cards offer
- Flexibility – withdraw cash, pay for EFTPOS transactions or make remote payments over the internet or telephone.
- Zero interest charges.
- Zero debt – as you only access your own cash you can’t accumulate debt.
- ATM access – withdraw cash from your institution’s ATM without fees.
- Security – if your debit card is stolen or lost, you know that only the amount of money in your account is at risk, and you can limit this by having a separate online savings account.
- Some debit cards also provide fraud protection for online purchases similar to that offered by credit cards.
Join the trend
Debit cards are now the most common payment option in Australia.
RBA statistics for 2013 show $3.22 billion in debit card transactions, around 15% more than the previous year and double the value of credit card transactions.
What are your thoughts?
Do you think you could leave your credit card at home? Or do away with it altogether? Is there anything else you’d like to know about credit or debit cards?
Join the conversation — leave a comment below and let us know what you’re thoughts are.