Debit Cards
Debit Cards

The debit card is a fairly recent innovation that
has become incredibly popular with consumers. They
offer the convenience of a credit card but instead
of being linked to a credit account they are linked
to a bank account.

When you make a purchase with a credit card, the amount
of your purchase is charged against your line of credit.
Your balance grows with each purchase, plus you are
charged finance charges if you carry a balance.

Though they look just like credit cards, debit cards
work quite differently. With a debit card, the price
of your purchase is deducted directly from your bank
account. Debit cards act as a substitute for cash,
allowing consumers to access their funds on the spot
and not have to worry about carrying cash.

Basically, debit cards are glorified ATM cards. ATM cards
are only able to withdraw cash from a cash machine. Debit
cards can be used at ATM's too, but they can also be used
to pay for lunch at the cafeteria, buy groceries at the
supermarket, and fill your gas tank for the ride home.

In order to use your debit card you'll need to remember
your PIN number. But don't write the number on your card
or anywhere in your wallet or a thief will be able to
quickly drain your bank account.

Debit cards are very useful for people with poor credit.
Even though they can not qualify for a regular credit
card, they can still enjoy the convenience of not having
to stop at the bank or the ATM to get cash.

In addition to the convenience factor, most debit card
issuers do not charge fees when you use your card and
there are no finance charges to pay.

Debit Cards and Kids

When teaching your children how to manage money and be
financially responsible, debit cards come in very handy.
You can set up a small bank account for them to use with
their debit card. They will have to learn to manage their
expenses to avoid cleaning out their account.

The amount they can use is limited by the amount they have
in their bank account, so you can start with a small amount
until prove they can handle it responsibly. This can work
better than a credit card which will usually let you go over
the limit, and also charge you penalty fees for doing so.

Ed Lathrop is a successful real estate investor and a series 3 commodities futures broker.
He has extensive knowledge of the credit/mortgage markets.  He has built the financial
calculator Website, ezcalculator which is free to use and includes the calculator, "Pay Your
Credit Card Debt Quick."  Ezcalculator can be found at Mortgage Calculator or by going to
ezcalculator.com