Amazing! Credit cards have been around for ages and making bucket loads of money for banks, for as long. Due to the recent financial meltdown, consumers are finally realising that spending on credit simply can’t be sustained. When there’s a financial plunge, it’s somewhat challenging to remove yourself from the debt created by credit cards.

The smart consumer now keeps 3 different types of financial instruments in their wallet or handbag – cash, debit card and credit card. Essentially, there’s a place for each one and using them properly will save you money.

Without doubt, credit cards will eventually spin you into a credit spiral and that needs to be curtailed.

Living within your means is acknowledged by the majority of financial industry leaders as the sensible and cost saving approach to start adopting.

With that in mind, let’s check out the benefits between Debit Cards and Credit Cards

Spend what you can afford when using a debit card. Much like cash however it’s in your account instead of your pocket. Temptation is curtailed , to a degree here, since you’re only going to be able to spend what you’re able to afford.
Interest Free spending on a Debit Card. Yep, you’re living within your means, watching what you spend and not paying any interest payments to a bank. That’s a great thing!

Now, what’s the benefits between a Debit Card and using Cash?

Tracking Your Spending should always be a part of your financial planning. Your Debit Card should have a good account keeping web interface so you are able to review purchases whenever you need to. If yours doesn’t, think about swapping to one that does as this function is critical to you avoiding overdrawing the account (obviously, banks like you to do this).
Safeguarding the loss of cash through misplacing it or even theft is a pretty important consideration. Once you lose cash, it’s gone forever. Misplacing your debit card is certainly an inconvenience however they can be cancelled online (and make sure yours can be) and then replaced.
Convenience of having no cash and still being able to make a purchase with your funds inside a debit card is having your cake and eating it. I know I’ve often been out shopping and forgotten to draw out any ‘traveling’ cash. Thank goodness I had my Debit Card to make that bargain purchase.

In a nutshell, Debit Cards are convenient, save you money and keep you out of the credit card debt spiral.

• Using a credit card is likely to end up costing you interest charges.
• Tight credit encourages managing your money and that leads to spending control through the use of a debit card
• Living within your means and using your own money suggests you’ll be checking balances more regularly and therefore have a better control on expenditure
• Look for Debit Cards with government guaranteed funds protection.
• The majority of Bank issued Debit Cards will actually allow you to overdraw your account – guaranteeing you end up paying fees to them. It’s estimated the banking industry earns $38 billion a year in overdraft fees.

When it comes to card theft, the typical scenario for credit card theft is for the thieves to charge merchandise, sell that and recognize the money. Debit cards on the other hand, are an instant “cash out” financial instrument. For thieves and debit cards, they’re going to be targeting your PIN number — to extract cold hard cash from your bank account. Skimming is the technique by way of setting up equipment to capture keypad information as well as Mag strip data when you enter these at merchants, petrol stations, restaurants and ATM machines.

Use recognized ATMs.
When you think about it, a thief needs to be able to attach as well as retrieve their skimming devices so they are able to use the gathered data. They’re more likely to install these devices in non-bank settings where there is less traffic and no surveillance equipment.
With this in mind, it’s wise to frequent ATMs in a banking environment.

Accounts should be closely monitored.
The quickest way you’ll probably detect fraudulent activity is by using debit card accounts that can be accessed online rather than waiting for monthly statements to arrive. Bear in mind, the majority of countries require you to report the theft or loss of your card or PIN before they’ll accept their listed liability for the unauthorised withdrawals.
Debit cards (as well as credit cards, for that matter) should always have easy online account management

Be wary of pumping petrol
Some countries have higher skimming incidents at petrol stations. And especially where cards are use right there at the petrol pump. There’s only a few manufacturers of these pumps and obtaining a key to a pump from a disgruntled employee would be a relatively easy task. So again, avoid entering a PIN number and opt for signing for the purchase.

Visa recently advised their branded debit cards had overtaken their credit card line, in terms of overall dollars spent on purchases. This sort of trend is nothing new either. The Nilson Report indicated that the 2006 figures for debit transactions exceeded credit transactions in 2005 – this is a steady gaining market share ever since.

Consumers are becoming more and more responsible for their spending. The recent furore in the financial markets highlight the fact we all need to both watch our pennies as well as better manage money through cost effective, secure and benefit rewarding financial instruments. Debit cards provide this.

Todays’ savvy consumer would almost certainly carry cash, a debit card as well as a credit card. Different circumstances dictate the better use of one of these. Paying with either cash or a debit card will see you less likely to overspend as you’re living and paying for items within your means – a true debit card will only allow you to spend what is within the debit card.

Look out for debit cards that also provide real time and real world consumer rewards such as immediate Merchant discounts.