Things You Should Know About Debit Cards
Over the years, bank cards (or debit cards) have started to gain more popularity. Besides the obvious reasons of convenience, the wide acceptance towards this facility also lie 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 facility, here are some information and tips that you might find interesting:
You could already own one
Yes, take your ATM card out of your pocket and have a look. If it bears any of these words – VISA or MASTERCARD – it is a debit card. In Malaysia, a normal ATM card with Malaysia Electronic Payment System (MEPS) facility can be used to carry out debit transactions but only with merchants that display the MEPS logo.
You won’t get into debt with it
Your card uses the money available in your bank account to make payments. So what you’re doing is basically spending money you already have. To put it simply, there’s no chance you’ll get into debt with it.
You can still get into debt with overdraft facility
However, if your card comes with an overdraft facility (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 debt.
You can set a limit to control your spending
Most banks in Malaysia set a daily spending limit of RM3,000 on your card. If you wish, you can scale it up or down to fit your preferences. It’s a great way to control your spending if you’re a relatively undisciplined spender.
There are charges involved
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, and many others.
Your PIN does not guarantee 100% security
Because it comes with a PIN, most people see it as a much safer payment instrument than a credit card. While this is, in some sense, true, it could also turn out to be a gateway to your accounts (if someone gets hold of your PIN). So make sure you’re vigilant enough when you’re using a bank card, all the time.