Your Debit Card: Don't Leave Home Without It

By Ilana Greene, Contributor

 Who among us can refuse the convenience of a credit card? Just pull it out and pay, regardless of if you really can afford it or not. Debit cards, well, not so much. As an extension of your checking account, you have to have the money right then and there to pay for your purchase. Also, debit cards cannot compare with credit cards when it comes to perks; flyer miles, gas cards, and money back offers make spending on your credit card appear as if you are earning, rather than spending money. Sometimes though, it is easy to get carried away.
According to the Federal Reserve, Americans carry a monthly average of $9,000 in credit card debt. That sounds a little above the average American’s expectations, not to mention a little above their ability for a quick pay down on debt.
Debit cards are a safer deal when you consider the factors: there’s little to no chance of running up a high debt on them, even taking overdraft into thought. On the downside, though, they come with little frills and even less rewards programs. Whatever perks debit cards did carry is being greatly reduced even as you read this, if not totally eradicated. Since the government passed the cap on swipe fees; the recent law sets a 21-cent cap on debit card swipe fees charged retailers by banks and lending institutions. Lenders, still apprehensive, have been pulling back the perks; they claim a potential loss of $14 – $19 billion. It seems now that banks have found a way to save their bottom line and somehow still offer perks on their debit cards.
Some banks are putting into place a new technology that will offer discounts to their customers on the retailers’ dime. The system will work something like this: when a banking customer logs into their online back account, there will be a tab which offers discounts available. When you find an offer that appeals to you, you activate the offer by clicking on it. The discount will be applied the next time your shop using your debit card at that retailer. So it seems like everybody wins:  the consumer gets a discount offer, the banks receive a commission on the sale, and the retailer sees an increase in business. This works as well for websites as it does for actual in-store shopping so the possibilities for this technology are potentially very impressive.
This may have impressive implications for the lending industry, in a slump due to the sluggish economy; this may be one more tool to get people back into the shopping malls and the internet shopping sites.  Right now the service is still grappling in its infancy, and let’s think about it, there are still too few perks. As it stands presently, a debit card can’t compete with the fun of applying for a credit card; there are just so many different rewards programs out there for a consumer to indulge in. Perhaps with time, the availability of these programs will expand as more people get used to shopping with their debit card. Soon you won’t leave home without it.