Four Important Differences between Cash And Debit Card

2019/02/25

Cash represents the amount of money that is available with an individual at his/her home or in a bank account. Any amount of cash deposited in a bank account increases the balance in the account.

Money in bank account can be used directly for making payments through checks or online transfers. Similarly cash can be withdrawn from the bank account using the check facility provided by the bank. Nowadays, most of the banks provide a debit card (also known as ATM card) to their account holders. This debit card can also be used for performing various banking transactions including withdrawal and deposit of money.

Four Important Differences between Cash and Debit Card.

Ease of Acceptance

Even though most of the merchants accept payment by debit cards today, there can be situations where a vendor may refuse to accept payment by debit card or debit card machine is not functioning. Cash on the other hand is readily accepted by all the vendors.

Safety and Security

Carrying too much cash in wallet is not a good option in many cases. On the other hand, it is much easier to carry a debit card. However, it is important to remember that in case wallet is stolen, an individual may lose only that amount of cash which was available in the wallet. A debit card on the other hand may give unlimited access to the card holder’s account as it can be used for making purchases without any need for a personal identification number. A debit card offers additional security in the sense that the card holder can report the loss of debit card to the bank almost immediately. This allows the bank to block the debit card before it can be used for making any unauthorized transaction by the perpetrator.

Loss due to Spoilage

A debit card will not get damaged instantly in case of  improper storage and mishandling. Even in cases where a debit card is completely damaged, card holder can request the bank for issuance of a new debit card. Cash (currency notes) on the other hand will get damaged almost instantly in case it is not stored or handled properly. In case, cash is completely damaged, an individual will not be able to get it exchanged for new currency notes which in some situations can result in a substantial loss to the cash holder.

Risk of Excess Payment

It is quite possible that excess cash may be handed over in connection with a payment made to a merchant. However, in case of a debit card, such a situation may rarely arise as debit card holder is provided with a transaction receipt. There are two copies of the transaction receipt and card holder’s signature is required on the merchant’s copy. This gives an opportunity to the card holder to verify the amount of the transaction. However, in case of any mistake by the merchant in entering the figure correctly, may in some situations result in an overdraft (negative balance) in the card holder’s bank account.

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