Monday, August 8

Why don’t banks want you to use debit cards?

In Spain, debit cards are the majority. There are some 49 million outstanding compared to 38 million credit cards, according to data from the Bank of Spain (BdE).

However, the banks seem determined to change this situation, something that already affects many Spaniards.

CaixaBank, the leading bank in our country by volume of assets, charges 36 euros per year for the debit card, even to customers who have their payroll domiciled and who meet the requirements of the Day-to-Day plan.

Instead, it offers the MyCard free of charge, a mixed payment method that allows you to withdraw money with debit at ATMs, pay in installments with interest and pay in two days without interest.

It is not the only bank that follows this strategy, as warned by sources from the financial product comparison

Bankinter only discounts the annual fee of the credit card, while it forces to pay a commission of 25 euros for the debit card. In addition, some entities require their clients to make a minimum consumption with their credit card in order not to pay commissions for the associated account, so they are forced to use it.

The arrival of the novel mixed credit cards has helped banks in their crusade to favor credit, explain sources at HelpMyCash.

With this means of payment, the bank gives its customers the possibility of using the same card to withdraw money for free at ATMs and to pay for purchases both in installments and debit. This is EVO’s strategy, which offers only a mixed card, with both debit and credit functions.

Why this situation?

There are two main reasons, as the HelpMyCash experts explain, but both can be summed up in a single concept: banks find it more profitable to use a credit card than a debit card.

Every time we pay for a purchase in a store with a card, our bank makes money. The merchant must pay a commission to the bank that owns the dataphone, the discount rate, and this, in turn, pays an exchange commission to the issuer of the card, that is, our bank.

And here is the quid of the question: fees are higher on transactions made with a credit card than with a debit one.

During the second quarter of this year, the average discount rate paid by businesses was 0.31% for debit card transactions and 0.37% for credit operations, according to the BdE.

In addition to earning more money each time we use them, credit cards represent another source of additional income for banks: interest on deferred purchases and the corresponding late fees if the deadlines are not met.

And we are not talking about just any figure: the average interest is around 18%. By giving customers a free credit card instead of a debit card, banks open the door for more consumers to eventually finance a purchase.

What banks keep giving out free debit cards?

Those who still prefer traditional debit cards still have options to turn to. Online banks usually offer them for free and without the need to meet any link requirement to those who hire one of their digital accounts.

For example, the Open Bank Current Account It includes a debit card with no issuance or maintenance fees that the holder will receive at home. The account does not have commissions or mandatory links, it allows free transfers and free money withdrawals with the card at the more than 7,000 ATMs that Santander has in Spain.

Many traditional banks still offer free debit cards, although not all of them allow you to get them without direct debit.

BBVA is an exception: the blue bank provides a debit card without annual fees to all holders of the Online account without commissions (a maximum of two). It is the Aqua card, one of the safest, since it does not have its number printed and its CVV changes. It can be used to withdraw money without paying commissions at the more than 4,500 ATMs that BBVA has in Spain.

Abanca It also sells an account without commissions or mandatory online contracting. The Face Account It can be opened with up to two cardholders and each will receive their own free debit card.

The entity allows you to withdraw money free of charge at all its ATMs and, five times a month, outside Galicia in the Banco Sabadell, Bankia, Bankinter, Caja de Arquitectos, Caja de Ingenieros and Euro 6000 networks.