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Debit transactions are generally subject to zero-liability policies, which is an encouraging factor for those with security concerns. Individuals who receive money by way of debit orders generally receive their funds before people paid by other methods. Those who need to make payments can arrange for automatically debited transactions. As money is immediately taken when transactions are conducted by debit, individuals are given access to more reliable account balances. Also, individuals are often rewarded by their financial institutions for using the debit system.
For many, debit transactions eliminate fears about electronic access to their personal assets. It is common for financial institutions to have zero-liability policies. A personal identification number (PIN) is required for point-of-sale (POS) transactions. If this security measure is violated and a fraudulent transaction occurs, the account holder is not held liable for the costs.
Those people who commonly go out to places such as clubs or lounges may appreciate that debit transactions allow a person to spend without thinking while remaining within a budget. Consider, for example, that a person takes a credit card to a club to avoid carrying cash. If she does not want to overspend, she must calculate each drink or she could spend up to her credit limit. A person making debit transactions, however, can still avoid carrying cash, access her money electronically, and thoughtlessly prevent overspending. She can do this because she will have access to only as much money as she has placed in the account.
Debit transactions give a lot of people ready access to funds that they would otherwise have to wait for. The number of employers who have employees' salaries debited from company accounts is increasing. This often allows those employees to access their wages after midnight on payday. Co-workers who do not get paid this way generally have to wait until after 2 pm and to receive checks that they must take to the bank. In the case of government benefits, if individuals do not have them debited from an agency's account, they may have to wait for checks in the mail.
Some financial institutions increase the benefits of debit transactions by developing rewards programs. These programs provide incentives, such as cash and prizes, for debit transactions. Creditors may also provide discounts when bills are paid by automatic debit.
Other benefits of automatic debit transactions are convenience and timeliness. For some people, this results in significant savings. People commonly have multiple bills with varying due dates. If a payment is forgotten, these individuals will be liable for late fees and perhaps higher finance charges. Having the money set to be transferred without participating eliminates the need to remember and prevents extra costs.
It is also timely and convenient that debited transactions are immediately recorded and ready for review. When payments are made with checks, for example, the checks have to clear. Until that happens, there is no record of the transaction and the account balance is unreliable. As debit transaction are generally instantaneous, the reflected account balance is more accurate.
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