No more waiting

Gone are the days when banking customers had to figure out how much cash they’d need to get through the next week, wait in line to get to a teller, and withdraw the entire amount. If they miscalculated, they had to go back and wait in line again, and if the bank was closed — as it often was before 10 a.m., after 3 p.m. and the entire weekend — too bad. These days, ATMs let you get cash whenever you need it, 24 hours a day, seven days a week. You can also pay for things directly from your bank account with the swipe of a plastic card.

Using your cards

A basic bank card is linked to your checking account, and you can use it at ATMs or in stores where you — or the sales person — slide the card through a reader. Debit cards, in contrast, carry a MasterCard® or Visa® logo as well as your bank’s name. When you buy something using your debit card, the cashier may ask, “Debit or credit?” If you say credit, you’ll get a sales slip to sign, just as if you’d used an actual credit card. But it doesn’t mean that you’re actually borrowing money to make your purchase. The money still comes right out of your checking account, only it’s processed by the credit card system whose name is on the card. So you can use your card to make purchases wherever those credit systems are accepted.

If you choose to process the payment as a debit, the cashier will ask you to key in your personal identification number (PIN) on a number pad. If your card isn’t linked to a credit card processing system, you can use it only to pay for purchases in places that use your bank’s debit network — including many grocery stores, drugstores, and gas stations.

Using a debit card rather than a credit card can help you manage your finances more effectively. When you use a debit card, you’re not borrowing any money and, therefore, not paying any additional expense in the form of interest charged by a lender. You’re simply accessing money in your checking or savings account. But when you use credit, you’re borrowing money from a credit card company— which will charge you interest on the loan if you don’t pay that balance back in full each month. That way you incur the expense of the interest you’re charged, making your original purchase even more expensive.

So if you’re using a card to pay for dinner, the movies, or anything that’s not worth paying interest on, putting that expense on your debit card may make more sense.