Visa Debit Card
A Visa debit card is for people who want to place a tight leash on their spending habits. A debit card works exactly like a credit card, but does not get credit. You can only use it to spend money that you have in your account. The current economic lessons has taught many hard lessons to Americans who are now increasingly getting more careful about their spending habits and this is why the popularity of debit cards is rising steadily.
How does a Visa debit card work?
The card works by debiting your account with every swipe of the card. If you have funds in your account, your debit card use will be honoured – if you don’t have funds in your account, your transaction will be turned down – it’s that simple. Other than this restriction, a debit card works like a credit card. You can use your card to make payments online or over the phone.
You can use the card globally and some visa debit cards even allow you to initiate a chargeback – meaning that if you have not received goods as per terms, you can return them and charge the transaction amount back to the defaulting retailer. Debit cards are also adequately protected against online fraud so long you report the fraud on time.
Advantages of a Visa debit card
1. A Visa debit card is accepted by all retailers, online and physical.
2. Debit cards work better than issuing checks. Cardholders can pay their utility bills and installments with their debit card. Plus, you don’t have to wait for things like check approval – a Visa debit card is approved instantly (so long you have the funds in your account).
3. A debit card helps you gain control of your home budget. You can only spend as much as you have and therefore you become a careful spender.
4. Some banks allow users an “overdraft” facility. This helps users in emergencies when their account has run out of cash. However, such overdrafts against debit cards are subject to interest and fees, which can be quite high.
Disadvantages of a Visa debit card
1. You should check with your card issuer if the Visa debit card is subject to annual or any other service charges. Also, check if your banker requires you to maintain a minimum acceptable balance. Some banks do require this balance when they issue a debit card. If the acceptable balance drops below the minimum required, there are fees and charges to pay.
2. You don’t get rewards on a debit card.
3. Though a Visa debit card is extremely useful, it does nothing for your credit score. No debit card transaction is reported to the credit bureaus.
4. Chargebacks and disputes on a credit card can be difficult on a debit card. This is because the account is debited immediately when the card is used and the funds are flushed out of the system.
Befor applying for you Visa Card you can check your credit score here for free.