If you’ve been making more purchases online recently or looking for ways to access your funds when you travel, you have likely come across the Visa debit card.
A Visa Debit card works the same way as your regular debit card, allowing you to buy items right away with the money from your bank account. It also comes with added features by using the Visa network that can potentially be of value to you as a consumer.
Let’s explore the pros and cons of a Visa Debit Card, so you can decide if this card is suitable for your financial situation.
What is a Visa debit card and how does it work?
A Visa debit card is a debit card that gives you access to the funds in your bank account through the Visa network. When using a Visa debit card, you get access to many of the features of a Visa card without having a credit card.
Your financial institution issues the Visa debit card. All the major banks in Canada issue a Visa debit card. You might even already have it in your wallet!
A Visa debit card allows you to make purchases or withdraw cash from ATMs, similar to a regular debit card. With this card, you can also make purchases online and internationally when you travel, wherever Visa is accepted.
The Pros of using a Visa Debit Card
Shop online with ease
Typically, when shopping online, we often rely on credit cards to make purchases, as they are more widely accepted. Usually, websites might not take a regular debit card or bank card.
Whether you’re someone who does not want to use a credit card, or does not qualify for a credit card, for example, if you are new to Canada or have recently gone through a consumer proposal or bankruptcy. Visa Debit is a great solution when you don’t want to rely on your credit card because you can use it in more places than a regular debit card.
If you have a Visa debit card, you can typically use it anywhere a Visa card is accepted, which makes it easier to shop online, or order food or groceries on mobile apps, without a credit card.
Accepted Internationally
If you travel internationally, you might run into problems when making purchases with a regular debit card. Or you might have to worry about carrying the correct currency all the time.
The Visa debit card offers you the option to use the card internationally, anywhere a Visa credit card is accepted. According to Visa, you can use your Visa debit card with millions of merchants in over 200 countries.
When you travel internationally, a Visa debit card can be a helpful way to access your funds at home.
Helps with Financial Discipline
Another benefit of the Visa debit card is that it functions as a regular debit card. If you’re somebody who struggles to stick to a budget, a debit card can help you be more disciplined with your spending. You are only using the funds coming directly out of your bank account. Using a Visa debit card makes you less likely to overspend and will not get into credit card debt.
No Fees or Interest from Visa
Another great thing about Visa Debit is that there’s no interest or debt associated with the card. So, if you are trying to get out of debt or avoid high-interest rates, a Visa debit card can be a good option.
Security for Fraudulent Purchases
According to Visa, the Visa Debit comes with Visa Zero Liability. If you believe there have been fraudulent purchases on your card, you should contact your financial institution, and the funds will be returned to you after they investigate the transaction. With a Visa debit card, you will not pay for fraudulent purchases made with your card.
The Cons of Using a Visa Debit Card
Spending is limited to the funds available
If you have a limited amount of funds in your bank account, a debit card will restrict your spending to that amount. Unlike a credit card, if you have an emergency expense or unexpected bill, you will not have access to additional funds you may need to cover emergency expenses.
Overdraft and Bank Fees
While Visa doesn’t charge you for the debit card, your financial institution might charge you overdraft or transaction fees for your account. Similar to other debit cards, your bank might charge you for every transaction you make or if you go into overdraft. Overdraft and transaction fees can add up quickly and be challenging to pay back. It is best to check with your bank what costs you are liable for with your account type.
It Doesn’t Help in Building Credit
If you’re trying to build credit, a Visa debit card will not help. Debit cards don’t report to credit agencies, and the Visa debit card is no different. Your credit score is an essential metric in the financial world.
If you do not have established credit, it can be challenging to get a loan, rent an apartment, or get a credit card. Using a Visa debit card will not help you improve your credit score, nor will it hurt it. A secured credit card may be a better option for you if you are building your credit score.
No Rewards or Points
With a Visa debit card, you won’t earn any rewards or points. Visa credit cards typically offer cash back or points that you can redeem for travel or other purchases. But if you’re using a Visa debit card, it does not come with any of these perks. You’re missing out on these potential benefits compared to a traditional credit card.
How to decide if a Visa Debit card is right for you?
Now that we’ve gone over some of the pros and cons of using a Visa Debit card, you may be wondering if one is right for you.
The answer will depend on your financial goals.
Looking to Build Credit?
If you’re somebody who is trying to build your credit score, a debit card, including a Visa Debit card, is not the right choice for you. Visa does not report debit card records to the credit bureaus, so it will not help or hurt your credit. If you have a bad credit score and want to build your credit score, a secured credit card or a regular credit card is better.
Building financial discipline?
On the other hand, if you tend to overspend or have trouble sticking to a budget, using a debit card can help you be more disciplined with your spending.
A Visa Debit card can help you stick to your budget while providing you with additional benefits on your debit card. Make sure that you monitor your account balance so you don’t want to overdraft and incur fees.
Is Visa Debit suitable for your financial goals?
While a Visa Debit card provides some advantages for payments over a regular debit card, you might still miss out on some perks compared to a secured credit card or a standard credit card. Before using a Visa Debit card, make sure you understand the advantages and disadvantages before deciding if it’s right for you.
Whether or not a debit Visa card is right for you depends on your financial situation and needs. Consider your spending habits and goals to decide if a Visa debit card is the best option for you.
If you’re looking to build credit and manage debt, our team of debt experts can help you explore your options to pay down debt, build credit, and work towards your financial goals. Contact us for a free consultation.
