MONEY
09/04/2018 12:27 SAST | Updated 09/04/2018 12:27 SAST

A Debit Card Won't Impact Your Credit Profile – Unless An Overdraft Facility Is Linked To It

Some common misconceptions about debit cards cleared up.

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A common misconception held about debit cards is that they can't impact your credit profile. While this is generally true, it does not apply to you if you're using an overdraft facility linked to your transactional card. Lenders will track how you honour your overdraft payments when deciding whether or not to grant you credit.

Not being aware of this, some consumers do not take care to deposit sufficient funds into their accounts on a monthly basis to settle their overdrafts — ultimately affecting their credit score.

It is this and other common misconceptions about debit cards that Ryan Prozesky, FNB's consumer core banking CEO, has cleared for us below:

  • MYTH: Debit cards can't be used for online transactions; only credit cards

Over the past few years a number of online merchants started accepting debit cards as a form of payment, enabling consumers to conveniently shop online, while still enjoying the same convenience and security measures offered when using a credit card online. Furthermore, VISA or Mastercard credit and debit cards are accepted by all online retailers who display the logos on their websites.

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  • MYTH: Debit cards are just expensive

Not necessarily true. Prozeky suggests that consumers always opt for swiping or using their cards for purchases – as this service is offered for free by banks – instead of withdrawing cash, which can be expensive. If you really need cash, rather use your debit card to withdraw at selected retailer till points, as this is more cost-effective.

Debit cards use the latest security measures and technology in the market. However, the onus remains on consumers to always keep their pins and cards safe.

  • MYTH: Debit cards are more susceptible to fraud

Some consumers who have unfortunately been victims of crime still hold the view that debit cards are susceptible to fraud.

"Debit cards use the latest security measures and technology in the market. Most of the cards are chip and pin enabled, offering an added layer of security to consumers. However, the onus remains on consumers to always keep their pins and cards safe by employing effective security measures provided by their banks whenever they swipe or use their cards online," said Prozesky.

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  • MYTH: You don't get bank rewards from debit cards

Although it is advisable for you to swipe your credit card to get maximum rewards, you can still qualify to get rewards when using your debit card. For example, there are bank-reward programmes you can join for free and get rewarded when using a qualifying debit card for certain transactions, such as swiping or shopping internationally.