According to VISA, US consumers spent more using their debit cards compared to credit cards in 2008. This change may reflect consumers' desire to reduce or prevent credit card debt. This is a tremendous shift in consumer behavior as consumer debt weighs on many peoples' minds in uncertain economic times, job layoffs, and uncertainty on the road to economic recovery.
Debit card transactions have many benefits over credit card use, although the protections for consumers is different for each type of card. You should check with your credit union if you are unsure about the benefits and potential disadvantages of debit card use.
Debit Card Advantages
- Convenience - no need to carry around cash
- No increase in debt - your funds are withdrawn from your account immediately
- Fewer trips to your credit union or trying to find an ATM
Debit Card Disadvantages
However you choose to pay for your purchases, be aware of any potential fees or charges. Cash still works great and is guaranteed to incur no extra fees to consumers.
- Requires consumer to maintain precise records of purchases
- Fraud protections may not be as good as credit card protections - check the terms of your debit card or call your credit union and ask about your level of protection
- PIN code required for debit transactions, although many merchants allow consumers to process a debit purchase as a credit purchase, only requiring a signature