The plastic money has both advantages and disadvantages  of debit cards which the cardholder should be aware of. The debit cards are given by banks or financial institutions and the cardholder uses money from their bank account.

Advantages and disadvantages of debit cards

Advantages of debit cards

• Use only what the cardholder has as it debits the bank current or savings account. The cardholder does not go into debt since they can only use as much as they have in the account.
• A debit card can be used in the same outlets as a credit card and acceptability is higher than for cheques. Getting debit cards is faster than credit cards and for those with bad credit ratings are not affected by getting debit cards.
• One may use the cards at numerous ATMs that have the logo of the association branding their cards in many countries.
• Goods and services can be purchased online. When goods and services are not received as per the order given, the cardholder can get a refund or cash back for the merchant.
• With a debit card, the cardholder does not have to physically visit their bank to get cash but can use the card at a merchant outlet
• When debit cards are used, the merchant gets refunded fast by their bank accounts being credited. They do not have to keep cash in their tills and so can save on security costs and bulk cash banking costing.
• It is easier for the merchants to balance their accounts since they are using reports from the Point of sale machines.
• The merchant does not have to struggle to get change, especially in small denominations when a card is used. When cash is used, the merchant must have the change in small denominations to give customers. It also takes more time to count the coins to balance the days work.

Disadvantages of debit cards

• The cards debit the accounts immediately as the transaction happens. This gives no grace period like in a cheque transaction or credit cards.
• It is harder for the customers to make their reconciliations on transactions since receipts’ are not kept by the cardholder for long. The statements for many current or savings accounts are given to customers quarterly or twice a year. For a customer to receive the e statements they have to pay a fess for the service.
• If the account has no money, the card cannot be used unlike for a credit card. If the card is allowed to overdraw the account, the charges are hefty
• when fraud is commited, the insurance in the card is less than the amounts on the credit cards

It is important for all holders of debit cards to consider both the advantages and disadvanages of debit cards.