Advantages of Cash Withdrawals on a Debit Card

Short on Cash? Use a debit card to get quick cash and solve your money troubles in an instant.

Although credit cards and debit cards are very popular, there are times when customers need to spend in cash – this is where debit cards come in handy.

For this purpose, customers need to obtain the cash from somewhere – and with the advent of cash out transaction facilities, using a debit card for cash withdrawals can be very convenient for consumers.

Advantages of using debit card for cash withdrawal transactions

There are a number of debit card benefits for consumers who wish to withdraw cash using their debit card. These include:

1. Lower interest fees. Credit cards charge consumers a very high rate of interest on cash advances. In most cases, this interest is charged immediately, with no grace period – using a credit card for cash advances can therefore be a financially disastrous practice. Compared to that, using a debit card for cash withdrawals does not incur any interest charges at all, which is one of the major debit card benefits.
2. Saves on ATM trips. If customers did not use the cash withdrawal facilities, they would need to withdraw cash from an ATM. This would cost them in terms of both time spent travelling to the ATM and withdrawing money, and ATM fees for any foreign or non-bank ATM used. Using a debit card can therefore save customers both time and money.

The option to provide customers with the ability to conduct cash withdrawals is entirely dependent on the merchant. There is no stringent rule that a merchant must allow cash withdrawals. There are some merchants who do not allow cash withdrawals, since merchants must pay 1% of transactions as a processing fee to the card company. However, most merchants allow cash withdrawal transactions since such transactions benefit them in a number of ways:

Greater number of shoppers. One of the debit card benefits is the fact that more customers shop at a merchant where it is convenient to do so. This means that allowing cash withdrawals will encourage shoppers to visit the store, and spend more on merchandise. The processing fees are more than recovered by the additional profits that the merchant enjoys.

Fewer trips to the bank. By allowing cash withdrawal transactions, the merchant reduces the amount of cash kept on premises. This means that fewer trips to the bank to make deposits. Trips to the bank are a vulnerability to the merchant – they are prone to theft and other crimes at such times. In addition, these trips put some strain on senior management, and reduce the number of staff available in the store.

Image source: thinkpanama

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