Benjamin Bankes has long advised the smart use of credit cards and urges you to be mindful of how you spend your money, especially when using plastic. In July 2009, the Federal Reserve said that revolving credit use (primarily credit cards) dropped by $6.1 billion on an annualized basis. Additionally, Visa announced this past spring that spending on Visa debit cards in the United States surpassed credit card spending for the first time in the company's history. The increased popularity in debit cards can be attributed to Americans being more careful about how they spend their money during the recession.
In a nutshell, debit cards withdraw money directly from the cardholder's bank account, as oppose to credit cards which borrow money, often at high interest rates. Using your debit card for necessity purchases, such as food, clothing and gasoline, and saving your credit card for larger purchases only, may help you understand how and where you spend your money.
Overall, debit cards are a good alternative to using credit. Be careful not to overspend the amount in your bank account however, as you may incur an overdraft fee. Talk to your bank for more information on debit cards and overdraft fees.
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