5 New Year Debit Card Money Saving Tricks

Payments by debit cards surpass cash transactions in the UK. Debit cards are the preferred payment option by consumers because of ease and payment spontaneity. Spontaneous transactions with no security pins required drive the UK’s contactless technological platform.

Findings: Statistical research and forecasts show that in the UK by 2026, there would be approximately 60 million card transactions daily. 2017 had debit card payments at £13.2 billion with a rise by 14% compared to 2016. 98% of UK consumers make payments with their debit cards daily with an average of six out of ten impulse buyers.

Convenience, acceptability, safety, cash-back and anywhere payments encourage debit card use. There are accompanying costs associated with using debit cards.

Tricks to adopt with debit cards: 

·         Only use at your bank’s ATM: you can save money by withdrawing money with your debit card only at your bank’s ATMs. This is because there are no charges on withdrawals from your bank’s ATMs. Using debit cards at other banks ATMs comes with a usage fee.

·         Be aware on purchase charges: be aware of what charges entail before making any transaction payment with your debit cards. Avoid unnecessary charges by knowing product/service specific transactional rules and cost implications.

·         Avoids fees with bounced cheques: a debit card provides peace of mind. Checking accounts on the other hand have to be adequately funded to avoid bounced cheques. Fees get charged on bounced cheques as a punitive measure. Using debit card payments help avoid such worries.

·         Spending power: you can spend only what you have in your account balance with debit cards. Credit cards work on having credit limits with the need to pay off balances. Debit cards enable you spend what you actually have.

o   Budget planning: debit cards encourage individual budget planning. Personal budgets work best with money income you have and not projected credit injections or loans. 

o   Track spending: setting limits on your spending is critical to saving money. You can set limits by imbibing financial discipline. Link your debit card with mobile or online banking to help you track personal spending.  

o   Savings habit: using debit cards encourage a savings culture. Research from a target group showed beneficiaries increased savings after they deployed the use of debit cards. Debit cards help improve personal savings in the long run.

·         Large bulk single withdrawal: make a large single withdrawal rather than several small withdrawals. Avoid several processing fees when you withdraw numerous times. Numerous fees from several withdrawals add up and make a difference in the long run.

Withdraw money that would last the long haul if required than numerous withdrawals.

Conclusion:

Contactless and specifically debit payments in the UK outweigh cash payments. However debit payments come with transactional fees. Use debit cards only at issuing debit financial institutions to avoid fee charges. Beware of fees before transactions and avoid unnecessary charges. You can improve your spending power with debit cards with budget planning and spend monitoring. Debit cards help you reduce fee cost by making one-time bulk single withdrawals.