Disclaimer: The article and product(s) that is/ are mentioned are non sponsored. All insights are based on personal opinions and researches done. The information would have been updated during the time you read this article. The resources are based on the day of this article being posted.
Debit card is not just a tool for payment, but an essential plastic card to withdraw cash from any ATM machine.
I believe most of you have at least one debit card in your wallet or purse. Issuing debit card seems to be a must when opening bank account everywhere. It had replaced the traditional ATM card which used to be a thing in the past.
The easiest way to differentiate a debit and ATM card is the existence of Payment Processing Network logo. With VISA and Mastercard as the most frequent used networks.
Another main difference from outlook is Debit card comes with a chip while ATM card is typically having magnetic stripes.
According to the news in September 2019, "those who don’t change their magnetic-striped cards (in Thailand) to chip cards will no longer be able to use them with ATMs or card swiping machines after Jan. 15, 2020."
The main concern is always the security and privacy. As chips are considered more secure to magnetic stripe, according to the article above.
The question is what's so important for that additional "logo"?
Only with these Payment Processing Networks, we could use it to purchase anything around the world. The same goes to withdraw money overseas.
These are the conveniences we have been taken for granted, so far. ATM cards could only be used to withdraw cash from ATM machines (not to be mentioned: The same bank only)
The conveniences are not the only reasons "Debit Card" becoming so popular.
Debit card has almost 0 requirements for applying. All you need is a little amount of card issuing fee (Typically 100-200 THB) and time for queuing at the bank, to open a saving account.
Since debit card is tying with ones' bank account, there is nearly no risk banks would need to handle. The debit card holders could only spend what is available in their bank account.
No risks as late payment, skip payments that credit card holders might have.
But...The real question is "Why I cancel my debit card?" and you should too.
Reason #1 Rewards
In IPI, we often emphasise getting the most out of every cent you would have normally spend.
"The Most" is typically referred to cash back or (and) points that credit cards offered.
To use redeem points for free round-trip business class ticket or additional 2% cash back on your ordinary spendings. This is unarguably the best reason to switch the traditional payment method from debit to credit cards.
Well, this reason does not apply to all debit card out there. But most of it.
Kasikorn Bank occasionally having discounts for its debit card holders. Such as the partnership with Grab and SFX cinema. Occasionally.
Reason #2 Unnecessary Annual Fee
Debit cards typically charge an Annual Fee. Not just for the occasional partnership promotions, but to payback the Payment Processing Network that the small plastic card carried.
Payment processing Network charge a very minor amount of interchange fee for each transactions. As consumers, we would never realise it. Since the merchants typically charge us the exact amount for a product/ service by cash or putting on card.
But, the banks (issuers) are not charities. Nothing is free.
That's when charging a decent of annual fee makes sense.
Take an example from Kasikorn bank. It charges an annual fee ranging from 250 THB (KDebit) to 700 THB (KMax+) in its debit card lineup.
For KMax+, 400 THB of the annual fee is actually for Personal Insurance for its card holder. But it's still a 300 THB annual fee.
Some banks even charge for annual fee as high as 1,599 THB for a debit card.
Meanwhile, credit cards offered by major issuers often offer 0 annual fee, with benefits of airport lounge access, travel inconvenience insurance and even reward points.
Reason #3 Digitalisation
While moving into cashless society, the frequency of using cards is getting low, using cash is even lower.
Almost every transactions could be completed by scanning QR code or barcode.
Thanks to the rise of e-wallet (Linepay, True Money Wallet, Alipay) the transactions could be completed a lot faster and more convenient. E-wallet could be linked with credit cards, so no reward will be missed (Depends of T&C from banks). E-wallet could also be linked or topped up with bank account. Bypassing the need of debit cards.
The main concern is: How money withdrawal could be possible without a physical card.
Cashless withdrawal is possible through scanning QR code too.
(Disclaimer: Illustrations from Kasikorn Bank App- KPlus, according to personal experiences)
Reason #4 Additional Charge from Selected Merchants
This is not a very common situation. But it is indeed annoying when happening.
Take an example from Cheaptickets.
It charges a transaction fee for all kind of debit and credit cards, except Mastercard "Credit".
That is a 1,950 THB you should have never spend.
As mentioned, it is not a major factor, but yet still remains as one of the reasons.
Alternative Options
Well, these 4 main reasons are never enough to beat the "What If" situations we would probably have.
The worse case scenarios. From phone losing internet connection to withdrawing cash overseas.
There is always a "what if" to keep a debit card in our wallet.
Here is always a solution. An assurance, perhaps.
In an article published earlier, various travel cards are briefly introduced. Today, we are going to recommend 2 travel card that could be great alternatives for ordinary debit card.
A. youTrip by KBank
Photo Courtesy: you.co
This is definitely a no brainer. "0" annual fee, "0" application fee and no overseas ATM fee till 30th August 2020.
Well, local ATM withdrawal fee is still applied. But, don't forget this is a "What If" card and withdrawal fee is applied to most debit cards too (among different issuers and in different provinces)
Besides or the perks of regular travel card (special exchange rates for foreign currencies), it takes just 5-7 days to have the card delivered to you.
This is highly recommended as debit card alternative. However, it is only applicable for Thais.
Link for more information/ application: https://www.you.co/th/en/
B. TMB ALL FREE
TMB ALL FREE is also another major travel Cardin the market.
Unlike youTrip, TMB ALL FREE only makes sense for certain users. It comes with application fee of 350 THB and annual fee of 250 THB, that are not lower than an ordinary debit card.
But, it still make sense as annual fee waiver offered.
Well, to achieve the highest value of "worth it" (waived annual fee) from TMB ALL FREE is by building relationship with TMB bank.
Another huge highlight of TMB ALL FREE is there is no additional fee when withdrawing cash from any ATM machines in Thailand.
Indeed a great alternative of regular debit card, only if annual fee is waived.
Link for more information: https://www.tmbbank.com/accounts/transactional/all-free.html
The key feature that these 2 travel cards obtained while neglected by other players (Krungthai travel card, SCB planet) is indeed cash withdrawal from local ATMs.
This key feature makes youTrip and TMB ALL FREE being the best alternatives cited by IPI.
Bottom Line
What's typical is not always the best option out there. Keep on exploring to find the best deal.
As always, get the most out of every THB you would have normally spend.
More importantly, cut off the unnecessary expense that you would normally overlook. Annual fee of 300 THB from a regular debit card, for instance.
There is nothing wrong by keeping debit cards, but one must never stop pushing the boundaries. To step out from comfort zone and think outside the box. You would always find a better alternative or solution.
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