Pros & Cons of Debit/ATM Cards

Pros of Debit Cards

  1. Debit cards are usually widely accepted
  2. No need to carry cash or your chequebook
  3. Debit card can be used as an ATM card at ATM
  4. Debit card can be used like a cash/ cheque when buying an item
  5. No risk of debt
  6. Fewer fees as compared to Credit Cards such as Late payment fees, Interest charges, etc.
  7. Pay your bills immediately, unlike using a credit card to make payment and get the bill later
  8. It keeps you within budget which is limited to spending the amount of money you have in the associated bank account
  9. 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. One needs to have enough money in his/ her bank account to cover for the amount of purchase transaction
  4. Higher risk involved in case your debit card is lost/ stolen
  5. You can't improve your credit score through a debit card
  6. Balancing your account is difficult, if you don't record every transaction of debit card
  7. You are unable to take advantage of reward points, cashback offers, etc. like in case of exclusive credit cards
  8. Lower level of protection against fraud
  9. If the purchase amount exceeds your bank account balance, you can't use your debit card for such a purchase