Advantages of debit card over cash

What are the advantages of using a debit card over cash?

Debit cards have many benefits over cash. Debit cards allow you to track expenses and budget, help prevent overspending, and are more secure. You don’t have to carry bills or coins and you can pay for items much quicker with a debit card.

There are plenty of reasons to switch to debit cards if you’re still using cash.

Luckily for you, I’ll show you why you should be using a debit card over cash. I’ll even give you some tips on getting your first debit card if you don’t already have one.

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What Are the Advantages of a Debit Card Over Cash?

The advantages of using a debit card over cash include expense tracking, overspending prevention, security, faster transactions, and not needing to carry cash. Debit cards are convenient ways to pay for items quickly while managing your finances.

Above all else, a debit card is easier to use than cash. You don’t have to search in your purse or wallet for the amount you need. Instead, you swipe or insert your card into a point of sale machine.

The register authorizes the exact charge against your card. Within seconds, the computer verifies you have that amount in your account. The money is withdrawn from the account, and you get a receipt.

And that receipt doesn’t have to be on paper, either. You can choose to receive emails or digital receipts with each transaction. This way, you won’t have to keep track of paper receipts and have them take up space.

1. Track Your Expenses and Budget

Since your debit card records transactions, you can see where your money is going. Instead of tallying up receipts on a spreadsheet, you’ll get reports and dashboards. Log into your online account and see pie graphs, percentages, and charts.

Find out whether you’re over or under-budget on different categories within seconds. Have you maxed out your entertainment budget halfway through the month? Make a mental note to not spend any more on movies, music, or outings.

You’ll also see how much you’ve spent overall. So, you won’t have an extra $5, $10, or $50 burning a hole in your pocket. It’s easier not to give in to temptation when your money’s tied to a card.

2. Prevent Overspending

You don’t think much about any debit cards you have in your wallet. While you have a good idea of how much money’s in your checking account, you’re not spending it every day.

However, it’s a different story when you withdraw cash and put it in your wallet. You suddenly feel like you’ve got extra money and that you have to spend it. When you see $100 in your wallet versus having it in an account, you’re more likely to spend it.

Now imagine if you cashed an entire paycheck and put it in your billfold. You’d probably spend it on more impulse and frivolous purchases. When it’s in a checking account with a debit card, you’ll keep it for essentials.

Using a debit card over cash prevents you from overspending. You’re going to think about where your money’s going more when you have a debit card. And you’ll be more likely to check your account balance and be careful.

3. Enhanced Security

Debit cards give you more security when you make purchases. First, encryption and PINs prevent most cases of fraud. If someone does steal your card or its information, you can report it.

Most banks and credit unions have fraud detection and monitoring. You may be responsible for some of the fraudulent charges, but the amount of money protected will vary. Credit card purchases are typically reimbursed, but not all fraudulent debit card transactions are.

If someone steals your cash, it’s gone. There’s little hope of getting it back. It might not be a big deal if it’s $10 or $20. But imagine if you lose $500 or even $1,000. That’s a bit of a setback and could lead to financial problems. You don’t want to miss a rent or mortgage payment.

4. You Don’t Have to Carry Cash

Carrying cash can be a hassle. Change received means you’re often looking for somewhere to store coins. It’s often easy to lose your change, which is less than ideal.

5. Debit Card Transactions are Quicker than Cash

Cash transactions are incredibly slow and you’re making the cashier do math when returning your change. Debit card transactions are quick and don’t require you to get cash back. However, you can always ask for cash back on purchases with a debit card.

Does It Cost Money to Get a Debit Card?

Most banks don’t charge you for a debit card if you have a checking account. You’ll get one automatically unless you tell the bank no. Expect to get a debit card in the mail a week or two after opening an account.

Then, you’ll get a replacement card in the mail every few years or so. You can also order a replacement if your existing card is lost or stolen. The bank does not charge you for any of this.

Similarly, digital wallet services may not charge you for a debit card. Some, however, do. That said, it’s a one-time charge and is usually less than $10. Check your account terms to see how much you’ll pay.

A few digital wallet services make their money through debit card maintenance fees. Others don’t charge any. They charge payment transaction fees instead for all incoming funds. But sometimes the sender will cover those costs for you.

Are Debit Cards Safe?

Debit cards come with a chip. This is what an ATM or register reads when you use it to get cash or pay. Within that chip are your account details.

The computer within the machine verifies the data and that there is money in the linked account. A computer with the banking institution either authorizes or denies the request. And a record of the transaction is made on both sides.

Debit cards are safer than using cash because you can reverse those transactions. If something is unauthorized, you’re protected. Someone can’t drain your account or make unauthorized purchases without consequences.

What About Checks?

Paper and electronic checks are another way to pay from a checking or savings account. But many retailers are phasing out checks. In fact, many already have.

You’ll have less luck finding a business that accepts checks. However, nearly all companies and venues take debit cards. They’re simply more convenient.

Not to mention, why would you want to spend the time writing a check? It’s much easier to insert your card and pin number to complete a transaction.

What If I Forget My PIN?

Some registers and businesses will let you process a debit card as a credit card. This doesn’t mean you’re buying on credit. Instead, it means you don’t have to put in your PIN.

It also means the money isn’t instantly withdrawn from your account. It may take a few days to clear. At gas stations, the register may also only authorize a hold of $1 rather than the full purchase. So, your running or available account balance may not be 100% accurate.

That said, if you’ve forgotten your PIN, you should reset it. Contact the card’s customer service line to get help.

Summary: Using debit card over cash

The advantages of a debit card over cash should be more obvious now. Overall, debit cards are more convenient than cash. You don’t have to count out the exact change or find it at the bottom of a purse.

Plus, losing a debit card is harder to do and you can report it. Once you lose cash, it’s gone. There goes the money you need to buy food or pay rent. Debit cards also let you budget, track, and control how much you’re spending. Finally, you get fraud protection and more security.     


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John is the founder of TightFist Finance and an expert in the field of personal finance. John has studied personal finance for over 10 years and has used his knowledge to pay down debt, grow his investment portfolio, and launch a financial based business. He is committed to sharing content related to personal finance based on his experience in his career, investing, and path towards reaching financial independence.