Should you use a credit card or a debit card for your transactions? What is a debit card? Many consumers are considering what the right decision is in this regard. The good news is that both of these cards have the benefits and drawbacks. It is up to you to make the decision that is right for your particular needs. Consider both. Determine if a credit or debit card is the right one for the type of transaction that you plan to make. In some cases, either one could be the best choice.
What Is a Debit Card? What Is a Credit Card?
A debit card draws money directly from a checking account. In order to use it, you must have money in the bank to make the purchase. You are not borrowing money for this purchase. A credit card, on the other hand, draws from a line of credit that a lender has given to you. That line of credit has a limit but when you use a credit card, it draws up to that line. You do not have to have cash available to pay for that purchase. Credit is paid for over time instead. So, which is better? Credit or debit?
The Benefits of Debit Cards
There are some benefits of using a debit card. These cards do not allow you to spend outside of your means. Rather, you can only spend what cash you have in your account. Debit cards ensure that you have an easy solution to accessing that credit. You no longer need to write a check - your card does the job for you. There are no interest charges for using a debit card. Most banks have added reward programs
Some accounts have fees to consider. Some banks are increasing these fees as well. It is important to choose the right account and to bank based on any limitations on transactions, too.
The Benefits of Credit Cards
A debit is one that comes directly from the cash at hand whereas credit comes from a preset limit. However, credit cards do have their benefits.
- These cards allow you to buy now and pay for it later and over time. This means you can buy more when you need to do so.
- Credit cards often come with protection against fraudulent activities. This can help you to free up some of the risk of people using your card without your permission.
- Credit cards may offer other benefits; including cash back rewards, travel rewards and other discounts or promotional offers
In both cases, there are benefits to consider. Is credit or debit better? This depends on how you plan to use the card and what level of protection you want to have for that purchase.
