The material presented here is for educational purposes only, and is not intended to be used as financial, investment, or legal advice.
Avoid Debt with One Card in Your Wallet: Your Debit Card
We’re living in an era of convenience. You can click one single website where you can buy literally everything (looking at you Amazon) — and with a few taps and scrolls, food is delivered right to your doorstep (hello DoorDash).
Since you store your card information on the site or in the app, it takes nearly zero effort to make the transaction. Texting with your friend? Shop for clothes at the same time. Binging on Netflix? Order food the moment that craving hits without budging. It’s easy, almost too easy. Shopping and ordering become a pastime, and soon enough you’re massively overspending — and drowning in debt. Is online shopping and ordering delivery also a hobby of yours? It may be time for a financial intervention.
Keep One Payment Method — Your Debit Card
In the world of plastic, credit cards tend to get all the attention, especially when you can rotate among cards to spread the love. For credit abusers, it doesn’t feel as bad to have smaller balances on various cards, instead of a large balance on a single card — $25 here, $30 there, not so bad, right? It’s OK — if you record every dollar in your budget and regularly assess your spending. But it may not be OK if you lose track of your purchases. Does your Amazon online wallet have a collection of credit cards? You may want to replace all of them with one debit card.
Debit is great for compulsive online shoppers because it doesn’t create credit card debt. Mindless spending can cause a huge deficit in your checking account, but not debt. Overdrafting on your account and paying a fee are also consequences, which can actually be a good thing because it raises a big red flag: you need to cut back, now.
The upside of paying with debit is that it won’t accrue interest either. You have to pay with money you actually have — and not funds you borrow. Low on cash? Then you can’t click Buy Now. If you do ignore a negative balance or repeatedly enter the no-go zone, your financial institution can close your account. Whereas with a credit card, you can make the minimum payment, while turning a blind eye to any burgeoning balance, increasing interest and a bad situation overall.
Debit for Essentials like Food & Groceries
We have to eat and buy food, whether that’s shopping at a grocery store or ordering in, for example. Food is a necessity, but it’s how you purchase your food that can break your budget. Like with Amazon and other online retailers, using your debit card for a food delivery service (like groceries or takeout) helps curb unnecessary spending. You know that money is gone once you confirm your order.
To control your spending even more, try using your debit card to access cash for grocery shopping. Choose how much to take out and bring only that amount to the store — keep all other forms of payment at home. This practice nudges you to pay close attention to prices and negotiate what to buy, helping you to resist temptation. It’s a trade-off though; you’ll sacrifice convenience, but you can avoid debt and trim down the excess spending.
Debit for Mini Luxuries like Starbucks
Money ensures our needs are met. It should also be used for fun and pleasure, including those gourmet coffee and tea drinks — in moderation. Ah, but “that first sip feeling?” It’s tough to say no to a Starbucks craving. Unfortunately, for those who love a fancy beverage, Starbucks makes it really easy to drop $25 on specialty drinks and tasty treats. Used up all your funds in your Starbucks app while ordering? Quickly reload another 25 bucks using a credit card and you’re all set … for a few days … If that’s the case, the debit card can come to the rescue. Visualizing that dip in your checking account can help you better regulate those pricey Starbucks stops and keep your debt in check.
Better Budgeting as a Debit User
Convenience — let’s keep talking about it. Although it can have the power to trigger thoughtless and reckless spending, it does help make our lives — and budgeting — easier. Since debit is the digital equivalent of cash, you pay, log the purchase in the budget and it’s a done deal. Now you can skip the step of paying off your credit card balance every month! Debit also eliminates the risk of missing those payments and stress that comes with paying down credit card debt.
In short, having a spending, saving, giving and investing plan helps you master your money management. If you’re a newbie, the best tool to use is a budgeting app and you may have to navigate around some budgeting roadblocks before you become a pro. Stick with the plan and it’ll become a routine life admin task.
Keep in mind, credit cards aren’t the enemy! A lot of benefits and perks come with using credit. Sometimes, however, we need some assistance for more mindful spending — no shame in that game. That’s where the debit card comes in. For those everyday and habitual purchases, debit can help you slow down your spending and sidestep the threat of debt.
Debit Card Safety & Security
At Desert Financial, your Visa® Debit Card is fraud-protected and we act quickly to resolve qualified fraud claims. To protect your debit card, review your checking account regularly, report fraudulent charges or lost/stolen cards immediately, keep your debit card in your possession at all times, protect your PIN number and only use your debit card with trusted vendors. For more information about fraud, scam and identity theft protection, visit DesertFinancial.com/Security.
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