As a student, you’re likely dealing with numerous expenses, from textbooks and tuition fees to social obligations and personal needs. Managing your finances in a responsible manner can be a challenging task, but it’s essential for your overall financial wellbeing. One tool that can help you take control of your finances is a debit card. In this article, we’ll dive deeper into the benefits of using a debit card for students, some key factors to consider before choosing a card, and how to use it responsibly.
What is a debit card?
A debit card is a card that is linked to your bank account. It allows you to withdraw cash from an ATM, make purchases at stores and online merchants, and transfer funds to other accounts. Unlike credit cards, which allow you to borrow money that you’ll have to pay back with interest, a debit card only allows you to spend the money you already have in your account.
Benefits of using a debit card for students
1.Convenience
One of the biggest benefits of using a debit card is convenience. You can use your card to make purchases at millions of stores and merchants worldwide. Plus, you can withdraw cash from an ATM at any time of day, making it easier to manage your finances while on the go.
2.Budgeting
As a student, budgeting is essential to managing your finances responsibly. A debit card can help you stick to your budget and avoid overspending. Since you can only spend the money you have in your account, you’re less likely to rack up debt or accumulate high-interest charges.
3.No credit check required
Unlike credit cards, debit cards don’t require a credit check. This is ideal for students who may not have a lengthy credit history or a high credit score. You can open a bank account and get a debit card even if you have no credit history at all.
4.Security
Debit cards come with numerous security features that make them a safe choice for students. Most cards have a Personal Identification Number (PIN) that you’ll need to enter to make purchases or withdraw cash. Additionally, most banks offer fraud protection and will replace your card if it’s lost or stolen.
5.Rewards
Some debit cards offer rewards programs that can help you save money or earn cashback. For example, you may be able to earn points for every purchase you make that can be redeemed for gift cards or other rewards.
6.Building credit
While debit cards don’t directly impact your credit score, using your card responsibly can help you build good financial habits that will benefit you in the future. By managing your account effectively, you can improve your credit score and increase your chances of getting approved for credit cards or loans in the future.
Factors to consider when choosing a debit card as a student
1.Fees
Before choosing a debit card, it’s important to consider the fees that come with it. Some cards may charge monthly maintenance fees, transaction fees, or ATM fees. Look for a card that has low or no fees to avoid unnecessary charges.
2.Rewards
If you’re interested in earning rewards, make sure to compare the rewards programs offered by different cards. Some cards offer cashback or points that can be redeemed for gift cards or other rewards, while others may offer discounts on specific purchases or services.
3. Security
Make sure to choose a card that offers robust security features, such as fraud protection and a PIN. Additionally, look for a bank like Akudo which protects customers’ financial information.
4.Customer service
When choosing a bank and debit card, it’s important to consider the quality of customer service. Look for a bank that has responsive customer service representatives who are available to answer your questions or resolve any issues you may encounter.
How to use a debit card responsibly as a students
1.Track Expenses
One of the most important things to do when using a debit card is to track your spending. Keep an eye on your account balance and transaction history to ensure that you’re not overspending or going into debt. You can use mobile banking apps or online banking to monitor your account activity and set up alerts for low balances or suspicious activity.
2.Stick to a budget
Creating and sticking to a budget is crucial when it comes to managing your finances as a student. Set a monthly budget and try to stick to it as closely as possible. Use your debit card to make purchases within your budget and avoid unnecessary expenses.
3.Avoid overdraft fees
When you use your debit card to make a purchase, make sure you have enough money in your account to cover the transaction. If you try to spend more money than you have, you may be charged an overdraft fee, which can be expensive. Avoid this by keeping track of your account balance and setting up alerts for low balances.
4.Protect your PIN
Your debit card’s PIN is a crucial security feature that helps prevent unauthorized access to your account. Never share your PIN with anyone, and make sure to keep it in a secure location. If you suspect that someone has gained access to your PIN, contact your bank immediately to have it changed.
5.Be cautious when using ATMs
When using an ATM to withdraw cash, make sure to choose a machine that is in a safe and well-lit location. Cover the keypad with your hand when entering your PIN to prevent anyone from seeing it. Additionally, be aware of your surroundings and avoid using an ATM if you feel unsafe.
In conclusion, a debit card can be a valuable tool for students looking to manage their finances responsibly. It offers numerous benefits, including convenience, security, and the ability to stick to a budget. Before choosing a card, consider the fees, rewards programs, and security features offered by different banks. And when using your card, make sure to track your spending, stick to a budget, protect your PIN, and be cautious when using ATMs. By using your debit card responsibly, you can build good financial habits that will benefit you for years to come.
