How a debit card works for you
Debit card benefits
Motley Fool Money‡ reports that 90% of adults have a debit card. This is a very common type of card that is tied to your checking account at your bank. Debit cards have many benefits that encourage healthy spending and saving habits. Here are some ways that a debit card could benefit you.
Manage your spending
A debit card deducts funds from your checking account’s available balance as soon as the transaction is authorized. Since you know you have a set amount of money in your bank account to spend, you’ll want to keep a close watch when spending so you don’t incur overdraft charges. Unlike a credit card where you have to pay the charge back on a monthly bill. A debit card is essentially like using cash. A debit card is not necessarily better than a credit card. It all comes down to how you manage your spending. For some, a debit card is a better financial tool because it keeps their spending in check as you can see the funds leave your account instantly and you can’t spend more than the funds you have available.
Accessibility
Debit cards are accepted virtually anywhere you might shop, freeing you up from carrying cash or multiple cards. You may also use your debit card in an ATM to access cash (fees may apply).
Convenience
Debit cards offer convenient access to your funds without the hassle of driving to your bank or finding an ATM. This, in turn, also saves you time and possibly money.
Financial education
Using a debit card is a great way to learn how to balance your bank account and manage your money. Since funds are deducted from your checking account the moment that a transaction is authorized, you can easily track what transactions have occurred and your available balance using online or mobile banking. It is important to remember that an authorized transaction amount can change, for instance, if a tip is added at a restaurant.
Be aware, a debit card is not a recommended form of payment online because since the funds are gone instantly, if your card gets hacked, there is not much the bank can do to recoup your funds.
Debit cards can also be a great financial education tool for kids. Kids can learn the art of budgeting as the funds are instantly gone from their account when they purchase something. Many different banks offer youth checking and savings accounts, which you can explore if your child is ready for this financial step.
Debit cards are an accessible payment option for anyone who wants to practice mindful money management.
Explore our Financial Education Center for educational courses about finances, including checking accounts, savings accounts and budgeting.
When you click links marked with the “‡” symbol, you will leave UMB’s website and go to websites that are not controlled by or affiliated with UMB. We have provided these links for your convenience. However, we do not endorse or guarantee any products or services you may view on other sites. Other websites may not follow the same privacy policies and security procedures that UMB does, so please review their policies and procedures carefully.
