Debit Cards are the Credit Card Alternative

Information verified correct on October 1st, 2016

Many Australians are beginning to use debit cards instead of credit cards.

With the credit crunch, there has been a drop in the number of people being approved for credit cards. If you find yourself with poor credit, you may prefer to use the debit card advantage instead of credit cards.

Debit Cards Comparison

Rates last updated October 1st, 2016
$
Monthly Account Fee Debit Card Access ATM Withdrawal Fee Fee Free Deposit p.m. Details
St.George Complete Freedom Account
Waived account keeping fees when minimum deposit is met with no minimum balance.
Visa $0 $2,000 No account keeping fees, if you deposit $2,000 per month plus no minimum balance required. No ATM fees when using St.George, Westpac and BankSA ATMs. Open More
ANZ Access Advantage
Apple Pay now available.
Unlimited transactions at ANZ ATMs, EFTPOS, Internet, Mobile and Phone Banking.
Visa $0 $2,000 No monthly account fee when you deposit at least $2,000 per month. Other fee waivers available based on your personal situation. Open More
HSBC Day to Day Transaction Account
Your Visa debit card unlocks special privileges worldwide with the HSBC home&Away Privilege Program.
Visa $0 $0 $0 monthly fees. No ATM fees at over 3,000 HSBC, Westpac, St.George, Bank of Melbourne and BankSA ATMs. Open More
ING DIRECT Orange Everyday Account
$75 cash bonus.
Get a competitive ongoing variable rate when linked with a Savings Maximiser.
Visa $0 $1,000 No monthly fees, and you can use any ATM in Australia for free when you deposit $1,000 each month e.g your salary. More

Credit file and credit cards

Previously, it was very easy to get a new credit card. Banks would approve them almost on application and had more lenient procedures for card approval. However, with the credit crunch, banks have become more stringent in their lending criteria. In addition, many people have lost their jobs or are facing financial hardship, and they’re finding it difficult to obtain a new credit card with their credit files being in a bad state, due to late repayments or too many credit card applications made in one time.

The advantages of debit cards

If you find yourself in a situation with poor credit, you may be interested in looking into debit cards. You can enjoy quite a few debit card advantages by using a debit card instead of a credit card.

Debit cards are issued by the same institutions who issue credit cards. This means that the same payment processor is used for processing debit cards, so debit cards are acceptable everywhere that credit cards are, including various retail outlets, entertainment venues. They can even be used for shopping online, through the phone or through mail order catalogues. Debit cards are very convenient since they make it possible to shop via various mediums that only accept credit cards.

Obtaining and using a debit card

It is very easy to obtain a debit card, even if you have poor credit. Debit cards are issued to anyone who has a current account at a bank and there is no credit check required to obtain a debit card.

Since the card is linked to your account, there are no balances that can accumulate. Instead, the card uses funds that are already in the account. So a debit card is like a prepaid credit card in that the money is already paid upfront. Because there are no accumulating balances, it is not possible to accrue interest expenses – this is another debit card advantage that many people enjoy.

Some accounts do have overdraft facilities, and if your card is linked to such an account, it is possible to spend more than the money you already have in your account. In this case, you may find yourself paying overdraft fees and other fines, so you should be careful not to exceed your existing balance when using a debit card.

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2 Responses to Debit Cards are the Credit Card Alternative

  1. Default Gravatar
    Lynda | April 9, 2013

    How to use my debit card for hotel reservation

    • Staff
      Jacob | April 10, 2013

      HI Lynda. If your debit card is a Visa or a MasterCard debit card, you should be able to enter your card number when you go to book a reservation – same as a credit card. Depending on the card you use – further security verification may be needed before the transaction can be processed. Jacob

Credit Cards Comparison

Rates last updated October 1st, 2016
Purchase rate (p.a.) Balance transfer rate (p.a.) Annual fee
Virgin Australia Velocity Flyer Card - Balance Transfer Offer
Enjoy a 0% p.a. balance transfer offer for 18 months and also earn 2 bonus Velocity Points in the first 3 months on everyday spend.
20.74% p.a. 0% p.a. for 18 months $64 p.a. annual fee for the first year ($129 p.a. thereafter) Go to site More info
ME Bank frank Credit Card
Enjoy a low and consistent interest rate on purchases and cash advances, combined with no annual fee.
11.99% p.a. $0 p.a. Go to site More info
St.George Vertigo Visa
Introductory offer of 0% p.a. for 18 months on balance transfers and 1% p.a. for 12 months on purchases, plus a low annual fee.
1% p.a. for 12 months (reverts to 13.24% p.a.) 0% p.a. for 18 months $55 p.a. Go to site More info
HSBC Platinum Credit Card
Receive a full annual fee refund and save $149 if you meet the $6,000 spend requirement. Enjoy a balance transfer offer and platinum card benefits such as complimentary insurances and concierge services.
19.99% p.a. 0% p.a. for 15 months $149 p.a. Go to site More info

* The credit card offers compared on this page are chosen from a range of credit cards CreditCardFinder.com.au has access to track details from and is not representative of all the products available in the market. Products are displayed in no particular order or ranking. The use of terms 'Best' and 'Top' are not product ratings and are subject to our disclaimer. You should consider seeking independent financial advice and consider your own personal financial circumstances when comparing cards.

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