Great tips for the Great Recession: Debit Visa cards help control spending

By Alex Tarrant Three banks in New Zealand (ASB, Kiwibank and Westpac) have introduced VISA debit cards as alternatives to credit cards. These cards may be useful for many consumers during The Great Recession, however long it lasts, because they can help eliminate dependence on credit card spending and debt. These type of debit cards have been around for years overseas but have only recently arrived in New Zealand. They have all the characteristics of an EFTPOS card with the addition of a Visa number (16 digits, partner doesn't know theirs but seems to know your one off by heart). This means that the card can be used like a credit card when doing things like buying shoes on the internet or ordering pizza over the phone. However, there is one big difference between the two: whatever amount you're going to spend, you must already have it in your bank account. The new debit cards are basically super-EFTPOS cards that can be used in the virtual world. You do not need a credit card to buy stuff on trademe, but if you do make the switch (and get rid of the credit card), there would no longer be the option of using credit to buy stuff on trademe. One good thing about the new cards is they can help reign in and control spending patterns. In a time when personal finances may be getting tighter (insert The Great R word here), it might pay to have a look at getting rid of the big CC and moving to this new type of debit card. Especially if you're the type of person who doesn't have the credit card because you spend, rather, you spend because you have the credit card. By making the switch, you would only be able to spend when you have the money to spend. You would no longer have the ability to make an impulse purchase while justifying it by telling yourself that you're going to receive the income over the next month to pay it off. As Steely Dan said, you just go back, and do it again.* (At least some do - and for those who find it hard to stop this type of spending, these cards could be for you). Another plus is that debit card fees charged by the banks are less than credit card fees (about NZ$10 per year compared to upwards of NZ$70 for some credit cards). Because it is a VISA card, it can be used wherever VISA is accepted. So if you are looking for ways to batten down the hatches and cut spending, have a look at the new options available. You may be surprised to find that you can live without credit, and by doing so save money. For those trademe addicts out there, you can carry on buying, but by using a Visa debit card instead of a credit card, it could force you to live more within your income means. Here's all the bank credit card rates for your info. ______________ * Steely Dan, 'Do it again', 1972. Now you swear and kick and beg us That you're not a gamblin man Then you find you're back in Vegas With a handle in your hand Your black cards can make you money So you hide them when you're able In the land of milk and honey You must put them on the table You go back Jack do it again Wheel turnin round and round You go back Jack do it again