Debit cards are great for paying for things immediately. Money comes straight out of your bank account, and as long as you don’t go overdrawn, you won’t run up debt. Debit cards also give you free cash withdrawals at many ATMs. If you’re dealing with a retailer who charges a fee for credit card transactions, you can often avoid this by using your debit card instead.
The other advantage of debit cards is the contactless technology they increasingly feature. During 2014, spending on contactless cards rose by an astonishing 331%, as consumers relished the freedom to buy a magazine or coffee in seconds without counting out change. Now that contactless payments up to £30 can be made, more of us are using this technology as a matter of course.
If your debit card is used fraudulently, report it to your card issuer and they will refund your account straightaway in most cases, provided you’ve not acted fraudulently or without reasonable care (for example, you haven’t kept your PIN written down with your card or disclosed it to someone else).
The average transaction value (ATV) shows that we’re now more likely to use cards for smaller payments. There’s been a downward trend in transactions values since 2011, and this could well be linked to contactless technology which was introduced in the UK in 2007. For retail sales, the ATV in November 2015 was £31.88, down by 12p from the previous year and hovering close to the £30 contactless payment threshold.