A debit card is sometimes offered by backs to account holders in place of a standard ATM card. It is still an ATM card however because it has a MasterCard or Visa logo it can also be used like a credit card, with a couple of exceptions. First a debit card takes the money direct from your bank account therefore it does not incur any fees. So is this good and should you be using a debit card?

A debit card is given to someone who opens a checking account at a bank and asks for a debit card. These cards are used like a credit card but do not come with the hassles of fees and penalties. Debit cards never have to be paid off and users never have to worry about late payments. These cards make it so much easier to purchase things in the store as well as online. Debit cards are quick and easy to use. With the swipe of a card a payment is made and that is that. Lose the paper and go plastic!

If you are someone who is not good at managing money, then a debit card might be good for you. Debit cards are able to teach people to manage money, especially those who overspend a lot or have had issues in the past dealing with credit cards. These cards come with a safety net because of the fact that they are joined with the checking account which provides only as much money that is in the account itself. Say goodbye to checks and dollar bills because plastic is the new trend.

You now know what a debit card is and how it works and there is the other side of this coin to consider. If you think you can control your spending habits and not use the debit card unwisely they can be a great benefit to you. However some do not use them wisely and if not used carefully they can have great troubles.

As you know having a debit card means instant access to your checking account, so every time you use your debit card you should record the purchase in a handwritten ledger or on the computer just like you would when writing a check. The largest pitfall of the debit card is an ATM machine because many will take cash from the machine on a regular basis without considering where it is coming from.

If you are not careful and responsible with a debit card the money you deposit will disappear so quickly it's like it was never even there. To make matters worse you can overdraw your account very quickly without even writing and bouncing a check. The receipts that you get from ATM machines are not accurate and do not tell the correct amount that is in your account or what transactions have cleared.

Like regular credit cards, debit cards can have pre-authorization limits or blocks placed on them. This is a safety measure that some merchants put in place that will not let you spend over a certain amount until your transaction has been processed and cleared the account. An example of this would be if you used your debit card to purchase $20.00 of gas at the service station, the station actually places a $50 or $100 authorization on the card. This can cause a problem because if you were planning on making another purchase elsewhere and you needed that other $30 or $70 to do so then you will not have access to that money until the pre-authorization limit is removed

Debit cards are also subject to blocking just like a credit card. This means that some merchants can block off a set amount of money in the account until your transaction with them is processed. Case in point: using a debit card to pay for a $20 visit to the gas station, but the store blocks off $50 on the card. If the extra $30 was earmarked for something else, you will run into problems until that block is removed. Debit cards are a good choice if managing money is a problem. But, learn you use them wisely or you could run into trouble with your checking account balance.