I thought the introduction of Visa/MasterCard debit cards was genius! I hated carrying around and writing checks, carrying cash or using my credit card for purchases only to have to write a check to pay off that amount from my checking account later. Having quick access to those funds makes my life simpler for certain, but does it also have its drawbacks?
The other day my kids had asked if I had any money and I realized that I usually carry less than $5 in actual cash at any time. I always rely on my debit card. It also got me thinking about experiences in the past that maybe I should have learned a little more about the pros and cons of cash vs debit cards.
First we have been victims of identity theft. Around Christmas one year we found someone had spent almost $1,500 fraudulently from our account. Thankfully the charges were flagged immediately at our bank because they were coming from Canada and not where we live so they shut down our debit card access. This was both good and bad. Certainly no further funds were taken fraudulently however we had no use of our cards for transactions we normally use like gasoline purchases. We had to rely on checks and cash until our new cards came in. We also had automatic payments assigned to those cards which we then had to contact those companies to set up a new payment option. By using our debit cards as much as we did it put us at greater risk of identity theft. Although we still use them we are more cautious about where they are used.
The second thing we learned about debit cards is they mean nothing when you have no power! During Hurricane Ike everything you wanted required cash. Checks were not even accepted because there was no way to verify funds. So even if I had a million dollars in the bank there was no way to access funds. Thankfully many stores and gas stations had power restored within a few days either by the electric company repairs or a power generator. Those few days without any power around town made many people realize how vital an emergency supply of cash is.
The third thing is I have been somewhere and had a purchase that was only a few dollars and without cash I had to use my debit card. Stores are charged a fee for card purchases so I am not doing them any favors by making them pay a fee for my small purchase. If I had a little more cash it would be a better option in those situations.
I am sure there are plenty of other pros and cons of both debit cards and cash. I certainly still like the convenience of the debit card but know that cash cannot disappear completely without effecting our lives at some point!
Which do you prefer to use? Debit Cards or Cash?
- Cash preferred over debit, bank survey finds (cbc.ca)
- Why You Shouldn’t Use Your Debit Card at the Grocery Store (thehappyhousewife.com)
- Prepaid cards: The safe way to take money abroad (confused.com)