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Debetkort – What to Know about Debit Cards

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The landscape of cashless payment solutions has evolved over the past few decades. This evolution has been driven by the need for enhanced security, convenience, transparency, and widely accepted methods of payment. All these have contributed to the transformation of the transaction experience.

Debit and credit cards allow for cashless transactions. Quite a lot of information about the latter seems to be available than the former. The fact that credit cards are a short-term loan is a reason why. Some of the questions people ask about debit cards include – hva er debetkort (what is a debit card) and the similarities and differences between both of them.

This article comprehensively answers the aforementioned questions by primarily discussing debit cards So, make sure that you continue reading to stay informed about this payment solution.

What Is a Debit Card?

What Is a Debit Card? - nj.com

This card is linked to your bank account. This is regardless of the kind of bank and account type that enables you to use it. It implies that it is not only an option with traditional banks. For example, there are credit unions and even online banking services that enable its use.

They all have something in common. It is that your spending power is determined by the amount of money you have in your bank account. In other words, you are spending your money with this payment solution. Of course, this is except for cases of overdrafts (if you have provisions for this).

How to Choose the Right Debit Card

ATM Card, Debit Card, Credit Card: What's the Difference? | America Saves

Sadly, resources on how to choose the right debit cards are scanty. You cannot compare the numbers to resources on how to choose the right credit cards. In the spirit of ensuring you choose the right one, here are some considerations:

Choose the Right Bank

A debit card is closely linked to your bank account. For one, this is because the fees and other things that have to do with the card are largely determined by the bank. So, you should start by choosing the right banking service.

Internal policies by the bank can also make your experience using this payment solution worth it or otherwise. For example, some banks have high minimum balances. This impacts how well their customers can use this payment solution.

So, choosing the right banking service is of utmost importance. There are various options to consider – traditional banks, credit unions, and online banks.

Choose the Right Account Type

It is one thing to choose the right bank and another to choose the right banking service. The choice of banking service will greatly impact your experiences as a debit cardholder. Some of the account types that may be considered depending on your needs and profile include:

  • Savings
  • Checking
  • Business
  • Youth
  • Pension
  • Deposit
  • Joint
  • Foreign Currency
  • Special Purpose

For starters, getting this card is rather automatic with some of these account types than others. For example, it is almost guaranteed that it will be granted if you operate a checking account.

The same cannot be said about the special purpose option. Some special-purpose account holders will even rather prefer other alternate features than being granted this payment solution. This is because of the cost implications of using one and other reasons. This proves the need for choosing the right account type if you are interested in getting this card.

Review Fees

Maintaining a debit card is not supposed to be a daunting task. One of the implications is that it should be a lot cheaper than using credit cards. The fact that you are not offered a line of credit with it justifies this stance.

As a result, fees that apply to using this payment solution should be carefully examined before you get one. Some of the fees you have to watch out for include:

  • Maintenance fees
  • Foreign transaction fees
  • Overdraft fees – You should start by deciding if you need this feature. This feature allows you to spend more than you have in your account balance at a fee
  • ATM fees

Make sure these fees are reasonable. It might even be better to consider options that rule out some of them. For example, some options do not require ATM charges as long as the bank’s ATMs and POS machines are used.

Customer Service

Of course, this is the bank’s customer service as your experience with the card is closely linked to the quality of the issuing bank’s service. Once again, this proves the need to choose the right bank.

Make sure that the bank offers excellent customer service as this is important for cardholders, especially during certain times. The bank’s customer service team should even be proactive rather than always waiting for you to contact them.

For example, you can be informed ahead of time about the expiration of your card and how to quickly facilitate another one. Such customer service approaches come in handy and save cardholders a lot of stress.

Security

Security measures must be put in place to protect cardholders from fraud and unwarranted transactions. For example, this could be two-factor authentication and top-quality secure chip technology. The right security measures also include being able to quickly contact customer service when you suspect fraudulent activities.

Mobile Banking

There should be a mobile app(s) for convenient use of the debit card. Such apps should make it possible to track transactions, make deposits, and perform other account management operations.

Overdraft Protection

For the record, not every cardholder wants this feature. So, you should not worry about it if you do not want it. But if you do, go over the policies that determine overdraft fees and other requirements about it. Make sure they are reasonable and you can work with them.

Accessibility & Acceptability

More often than not, this has to do with the availability of affiliated ATMs and POS machines. Debit cards have an increasing global acceptance; which means that you would be able to use them in many places.

However, using them on ATMs or POS machines that are not affiliated with your bank may cost you more. So, it is better to opt for cards from banks that have many ATMs and POS machines around your base.

Rewards

Credit cards (especially certain kinds) are great at offering rewards. Debit cards are nowhere near credit cards in this regard. However, some of them offer a bit.

You might want to consider such to enhance your experience as a cardholder. But while you are at it, compare the rewards versus the cost and make sure it is worth it.

Go Through the Terms and Conditions

You will be bound by terms and conditions that apply to users of your chosen card. As a result, you should not be unaware of any of the terms and conditions. This is especially as it concerns fees, restrictions, and policies at large. Do not get the card until you have a good idea about this.

Debit vs. Credit Cards – Major Differences

7 Difference Between A Credit Card & A Debit Card - Inventiva

There are similarities between debit and credit cards. For starters, they have the same appearance and some common details like the expiration date, security code, cardholder’s name, and card number. However, there are clear-cut differences between both and they include the following:

Fund Source

The debit card fund source is the bank account it is linked to. The financial state of the linked bank account determines what can and cannot be purchased using it.

On the other hand, credit cards are funded by the issuer as a short-term loan that has to be repaid at an agreed date. The repayment may be full (which is less costly) or partial (with the interest rate in full effect).

Impact on Credit Score & History

Debit cards do not impact your credit score and history. This is because they are not a credit line, unlike the case with credit cards. As a result, you cannot build, improve, or hurt your credit score or history with them.

Debt Profile

Credit cards impact your debt profile. This is clearly because the money spent using them is borrowed from the issuer. On the other hand, you do not accumulate debt using a debit card. The only way this can happen is if you use the overdraft option which also comes at an additional cost.

Spending Limit

The purchasing power of debit cards is determined by how much money is in the bank account the card is linked to. In the case of credit cards, the purchasing power is determined by the set credit limit by the issuer.

By the way, making purchases close to a credit card’s credit limit is not advised. This is because of the damaging effect it has on the cardholder’s credit score. For more information about this, you can visit:https://www.usatoday.com/.

Conclusion

More people are concerned about getting the right credit cards than debit cards. Well, it is equally important that the right debit cards are secured and used. Tips on how to choose the right one have been shared here in this article. You should put these tips to good use going forward.

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