Does Your Debit Card Affect Your Budget?

Debit cards are a common facet of American life. They are so convenient and preferred by retailers over checks. Many people never carry cash because their debit card is readily available. But how much is that tiny piece of plastic actually costing you?

Banking institutions earn at least 20% of their non-interest earnings from debit card charges. Using the card at an ATM can cost up to $2.50 per transaction. Some banks charge a quarter per transaction at the register as well. That seems like a small thing but even $5.00 in charges per month becomes $60 per year. How many tanks of gas are going to your bank instead of in your tank?

Pulling out plastic offers you a disconnection from parting with your hard-earned cash. That makes it easier for you to spend more when you’re paying via debit card. Try it sometime. Pay with your debit card then make a second purchase soon afterwards with cash. You’ll notice a much deeper feeling when those greenbacks leave your hand.

It’s a known banking statistic that debit cardholder are ideal “cross-sales” candidates, especially for loans. So, holding a debit card opens you up to more telemarketers and more junk mail. Each contact by these sales people ups your chances of falling for an offer that you really don’t need.

Debit card purchases open you up for overdrafts and can cost you hundreds of dollars in a single month. Paying with cash eliminates any danger of overdrafts, so when the bank account is low, hand over the bills instead of swiping the card.

Withdrawing cash for your food and gas budget can save you hundreds per month.