Switching from Credit to Debit
National Iron Bank has always encouraged the smart use of credit cards and advises you to be careful of how you spend your money, especially when you reach for your plastic.
In July of 2009, the Federal Reserve announced that revolving credit use (mostly credit cards) dropped by $6.1 billion on an annualized basis. Also, in spring of 2009, Visa reported that spending on Visa debit cards in the U.S. surpassed credit card spending for the first time in the company's history. The amplified popularity in debit cards is most likely due to Americans being more mindful about how they spend their hard-earned cash during these tough economic times.
Basically, debit cards withdraw money directly from the cardholder's bank account, unlike credit cards which borrow money, many times at high interest rates. Opting to use your debit card to pay for “basic necessities,” like food, clothing and gasoline, and saving your credit card for bigger purchases only, may help you see where you spend your money.
Generally, debit cards are a smart alternative to using credit. Of course, be careful not to spend more than you have in your bank account, as you may be penalized with an overdraft fee. Talk to one of the friendly representatives at National Iron Bank for more information on debit cards and overdraft fees.