9 Advantages of Using a Debit Card


The convenience of a debit card has made cashless transactions a daily reality for many consumers.

While we’re all familiar with credit cards, due to marketing around cashback rewards and sign-up bonuses, debit cards tend to fly under the radar in comparison. But debit cards actually come with a host of attractive benefits, some of which you may not be aware of.

woman using a debit card

This article will take a detailed look at the various advantages of using a debit card, but first let’s get into some basics.

What is a debit card?

A debit card is a type of payment card that is typically tied to a checking account. When a consumer uses their debit card to make purchases, they are drawing directly on the funds in their own checking account, rather than borrowing money from a credit line.

In this way, debit cards provide the convenience of cashless payments, just like a credit card. They also come with many of the same consumer protections that credit cards offer.

In addition to standard debit cards that draw on your bank account, there are also two other types of debit cards that don’t require an associated checking account.

  • Standard debit cards are connected to your checking account.
  • Prepaid debit cards are purchased with certain values loaded on to the card, allowing those without access to a bank account to make cashless or online purchases.
  • Electronic benefits transfer cards are debit cards with government benefits loaded on to them, issued by state and federal agencies.

Debit Card Advantages

Now that you’re familiar with the basics of debit cards, let’s look at the numerous benefits they offer. Here are some key advantages that make debit cards a popular choice for managing everyday finances.

1. Controlled Spending

Since debit cards draw directly from your bank account, you can only spend the money you have available. This helps prevent overspending and encourages better budgeting.

2. Convenience & Cash-Free

Debit cards are convenient and easy to use. Debit card transactions are fast and straightforward, eliminating the need to carry cash. At the same time, if you need it, you can easily withdraw cash from an ATM with your debit card.

3. No Debt or Interest Charges

Unlike a credit card, a debit card doesn’t pose any risk of going into debt. Although you can still go into overdraft with a debit card, it is significantly less risky compared to a credit card. For this reason, debit cards are great for those who want to stick to a budget, or even for teens and young adults looking to build good financial habits.

On top of that, you won’t have a credit card bill to pay each month.

4. No Credit Check

Debit cards don’t require a credit check or minimum credit scores to apply. In most cases, all you need to do is pay a small fee for the issuance of the card itself, once you’ve got a bank account. Your bank can send you a debit card within a matter of days, and you can usually activate them online.

5. Lower Fees

Even though your checking account will have certain fees associated, using a debit card won’t expose you to further charges in the same way a credit card does. If you’re switching from a credit card to a debit card, even for a portion of your expenses, then you can save money on fees and service charges.

Debit cards typically have low or non-existent fees attached.

6. Enhanced Safety

Debit cards are a much safer alternative to carrying cash. While you may lose your debit card or have it stolen, someone would need to know your pin to use it. This doesn’t apply to contactless tap payments, but there are limits on how much you can spend using contactless payments.

You can also have a lost debit card quickly cancelled once you report it to your bank. Most banks also allow you to set up notifications through a mobile app every time a purchase is made. This makes it easy for you to spot any potential fraud or unauthorized purchases.

7. Eliminate Checks

One of the most overlooked debit card benefits is that they can help you move away from using checks.

While checks do come in useful for certain kinds of payments, those instances are becoming more rare. Some vendors won’t even accept personal checks as payment, and where they do, it can take several days for the purchase to show up in your account.

When using checks, you also have to keep records to make sure you are not accruing overdraft fees. In comparison, a debit card makes payment and balance tracking quick, easy and completely hands-off.

8. Worldwide Acceptance

Debit cards are widely accepted by merchants and ATMs across the globe, making them a convenient choice for travelers and individuals who engage in international transactions. Major debit card networks like Visa, Mastercard, Discover, and American Express have an extensive global presence, which allows you to use your debit card for purchases and cash withdrawals in numerous countries.

9. Online and Mobile Banking

Debit card users often have access to various online and mobile banking features provided by their financial institutions. These tools make managing your finances more convenient and efficient.

You can easily track your spending, view transaction history, and monitor your account balance in real-time. Additionally, online and mobile banking platforms often allow you to set up account alerts, pay bills, transfer funds between accounts. You can even deposit checks remotely by taking a photo with your smartphone.

Potential Downsides of Using a Debit Card

While debit cards come with several advantages, it’s essential to consider some potential drawbacks as well. Here are the potential downsides of using a debit card, so you can make an informed decision about your financial tools.

1. Strict Spending Limit

Debit card purchases are exclusively linked to your own checking account. This means that the funds are immediately taken from your account upon purchase.

You can’t open a credit line on a debit card, so there’s no opportunity to take on a purchase and pay it off later like you would with a credit card.

2. Overdraft Fees

If you don’t keep on top of your account balance, it can be easy to go into overdraft with a debit card. The downside to the convenience of cashless payments is that if you aren’t habitually checking your account, you might struggle to keep track of your expenses.

3. No Credit Building

Since debit cards do not involve borrowing, they cannot be utilized to improve your credit score or build credit history. Credit cards are useful for those who need to establish or repair credit because credit card payments are regularly reported to the credit bureaus.

While a debit card carries no risk of debt, the downside to that is they can’t help you build your credit.

Frequently Asked Questions

How do debit cards work?

Debit card payments are linked directly to checking accounts. This means that you are simply making purchases electronically, with the money in your own bank account.

Debit cards are widely accepted and can be easily used for everyday purchases, online shopping and ATM transactions. They are secured by a personal identification number (PIN), which will either be attached to your card or decided by the user. Debit cards carry many of the same benefits as credit cards, without having to worry about debt, late payments or annual fees.

What is the difference between debit cards and credit cards?

Although they look much the same, debit cards and credit cards are two very different products.

The major difference between the two is that you essentially borrow money every time you use your credit card. This money is lent to you by your card issuer, and you are charged interest, which must be paid back through monthly payments.

A debit card only allows you to spend the money already in your account. There are several advantages and disadvantages that come with credit cards, compared to debit cards. Debit cards work for those who simply want to spend their money without having to use cash.

Steven Brennan
Meet the author

Steven Brennan is a freelance writer specializing in finance and cryptocurrency. He has an MA in Literature from Maynooth University in Ireland, and lives in the Pacific Northwest with his wife and young daughter.