Over the years, debit cards are gaining popularity just like credit cards. Besides the obvious reasons of convenience, the wide acceptance towards debit cards lies chiefly in the people’s confidence in the security (due to the Personal Identification Numbers, or PIN) they come with.
If you’re planning on switching from other types of credit facilities to a debit card, here are some information and tips you might find interesting:
You Could Already Own a Debit Card: Yes, grab your ATM card out of your pocket and have a look. If it has any of these words – VISA or MASTERCARD – printed on the card face, it is basically a debit card. In Malaysia, even a normal ATM card with MEPS (Malaysia Electronic Payment System) facility can be used to carry out debit transactions… though only at merchants displaying the MEPS logo.
You Won’t Get into Debt with a Debit Card: Under normal circumstances, your debit card uses the money available in your bank account to make payments. So what you’re doing with a debit card is basically spending money you already have. To put it simply, there’s no chance you’ll get into debt with a debit card this way.
You’d Still Get into Debt with a Debit Card: However, if you have a debit card with overdraft facility (i.e. which allows you to spend more than what’s in your account), that gives you the freedom to spend beyond your savings. That, of course, means you’ll still have a chance of getting into a debt problem with a debit card.
You Can Set a Limit to Control Your Spending: Most banks in Malaysia set a daily spending limit of RM3,000 on your debit card. If you wish, you can scale it up or down to fit your requirements. It’s a great way to control your spending if you’re relatively undisciplined with money.
There are Charges Involved in Your Debit Card: Despite common perceptions, fees and charges are part and parcel of owning a debit card. The usual charges include: annual fee, cash withdrawal fee (RM1) at MEPS ATMs, cash withdrawal fee (RM8) at all other ATMs, interests incurred when you use your overdraft facility, amongst others.
Your PIN Does Not Make Your Debit Card Fraud-Proof: Because it comes with a PIN, most people see debit card as a much safer payment instrument than a credit card. Whilst this is, in certain sense, true; what is supposed to be your fail-safe device (i.e. the PIN), could also turn out to be a gateway to your accounts (if someone gets hold of your PIN). So make sure you’re vigilant in protecting your interest when you’re using a debit card, all the time.
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