Credit Cards VS Debit Cards

These days everyone needs a credit or debit card to not only make purchases but to book airline tickets, reserve hotel rooms, and lease cars while traveling. You will need to chose between a debit card vs credit card. There are a lot of advantages to both cards.

One advantage of using a debit card instead of a credit card is that if your place of employment offers direct deposit, your paycheck can be credited to your debit card. This can also be done with social security and unemployment deposits. This gives people access to cash a lot faster than waiting for a check in the mail and then having to deposit or cash it at a bank. The direct deposit also avoids a check cashing fee that many banks and check cashing stores charge.

The disadvantage is the debit cards charge a transaction fee every time you use your debit card. The fee varies from card to card and is usually around $3.00 per purchase. No matter how big or small the purchase the fee is the same.

There is a big advantage of using a credit card instead of debit or savings when buying gas at the pump. When using a debit card some gas stations will put a $20 hold on your debit card for up to a week. This does not happen when using a credit card.

Debit card and credit card use has a lot of advantages and disadvantages. Credit is great if you always pay your balance before the payment due date is posted to avoid fees and interest charges. Few people do this however and this makes credit cards a bad choice for many people making purchases, as they will end up having to pay a considerable amount of interest on top of their purchase amount.

The advantage of conservative credit card use and paying on time is that it will greatly improve a person’s credit score rating. On the other hand, misuse of a credit card will hurt a person’s credit rating, and any future requests for credit, such as; different credit cards and applying for home and auto loans. The way a person treats their credit can also affect the rates they are quoted for car insurance and the amount they will pay in rent at corporate owned and operated apartment complexes.

When it comes to the question of debit vs credit, the answer might be that both are good to have for their own reasons. And always use both wisely, if you are financially conservative then you will be able to handle a credit card easily, if you are somewhat financially reckless then you should probably limit how much you use credit and focus more on making your purchases with savings.

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