Pros & Cons of Debit/ATM Cards

A debit card is a card used for cash withdrawal, making payments, online shopping, etc. Here, the money spent is directly from a your bank account immediately as soon as you use the card. Debit cards come with their own upsides and downsides as listed below,

Pros of Debit Cards

1. Debit cards are usually widely accepted
2. No need to carry cash or your cheque book
3. Debit card can be used as an ATM card at ATM
4. Allows Cash Withdrawal from ATM
5. Debit card can be used like a cash/ cheque when buying an item
6. Many debits cards such as MasterCard debit card offer 24x7 support for any query or for blocking the card
7. No risk of debt
8. No interest charges
9. Can Be replaced easily, if misplaced. Many banks do not even charge for reissuing it
10. Wide Range of Debit Cards is available
11. Since you already have your bank account with the bank, minimal documentation just for KYC compliance is required for issuing the debit card
12. Fewer fees as compared to Credit Cards such as Late payment fees, Interest charges, etc.
13. Pay your bills immediately, unlike using a credit card to make payment and get the bill later
14. It keeps you within budget which is limited to spending the amount of money you have in the associated bank account
15. Easier to get it as compared to a credit card

Cons of Debit Cards

1. Amount immediately debited to your account
2. Don't get credit period/ grace period of 20-25 days as in case of Credit Card
3. Additional fees is charged on more number of ATM withdrawals
4. One needs to have enough money in his/ her bank account to cover for the amount of purchase transaction
5. Higher risk involved in case your debit card is lost/ stolen
6. You can't improve your credit score through a debit card
7. Balancing your account is difficult, if you don't record every transaction of debit card
8. You are unable to take advantage of reward points, cashback offers, etc. like in case of exclusive credit cards
9. Lower level of protection against fraud
10. Debit card can be used for carrying out the transactions up to the amounts available in your account
11. If the purchase amount exceeds your bank account balance, you can't use your debit card for such a purchase