Debit Card: A Wise Budget Tool

Let’s face it – most of us have been there at one time or another. The end of the month rolls around, the bills have piled up, and the cash flow is flat-lining. You scratch your head and go, "Now how did that happen?" When you finally take a good look, you see that it occurred one purchase at a time, easily, without thinking about it. A new pair of designer shoes here, a fabulous night out on the town there, until all you see is a mountain of red.

But now you realize you need a budget, and you need to stick to it to dig yourself out of this debt hole you’ve created. Of course, the best advice is to never get in this situation to begin with. But if you have or if you want to avoid the pitfalls of overspending, one of the best budgeting tools available is the debit card.

With a debit card, you simply can’t spend what you don’t have. Combining the easy usage of a credit card with the budget-tracking of a checkbook, debit cards are fast becoming the card of choice. It lets consumers pay for purchases directly from their checking accounts. They spend only what they have; debts aren’t accumulated that have to be repaid later.

So what exactly is a debit card, and how does it work? A debit card is tied to your checking account. When you use a debit card, it acts as a "check." The money for the item you bought is deducted directly from your checking account at the time of purchase. Unlike a credit card, you won’t receive a bill later.

And that’s what makes the debit card such a useful budgeting tool. Just as you would when you write a check, you keep track of debit card purchases in your checkbook register, and can see immediately what you have spent, and how much money is left in your account. By keeping a daily record of your money, debit cards enable you to be much more conscious of what you’re spending, and what you’re spending it on. Debit cards tend to inhibit impulse buys because you know that once the money is spent, it’s gone.

Debit cards also offer consumers protection that just isn’t offered with cash and checks: zero liability fraud protection and dispute resolution assistance — in case there is a problem with a purchase. And a great reason to choose the debit card to help you stay in budget is that it’s accepted everywhere credit cards are accepted.

So if you’ve ever found yourself at the end of the month wondering where all the money went, take heart. With a little commitment to sticking to a budget and a wise budgeting tool like a debit card, you can avoid overspending and revive your cash flow.