Credit Card vs Debit Card – Which One Is Best to Use?
3 Reasons to Use a Credit Card vs Debit Card
There aren’t many individuals today who use a credit card vs debit card. If you’re reading this article, there’s a very high chance that you use a debit card vs credit card. That might be a sign that you are an impulse buyer and have a problem living within a budget.
But before you continue reading this, ask yourself these three questions: Do I pay my credit card balance in full every month? Do I have enough credit limit to make purchases for longer periods of time? Do I have access to a secure place to keep my card and other important documents?
If the answer is yes to all of them, then it’s time to start using your credit cards more often. Here are three good reasons why you should start using your credit card instead of a debit card or cash anytime and anywhere instead.
Why are Debit Cards, That Ask for a Deposit, More Popular Than Credit Cards, That Ask for An Annual Fee?
This question baffles me, actually the answers more so. If you’re buying a large item like an appliance or furniture, a credit card is usually the best way to pay for it. Damages can occur when handling the item or even the delivery service can have problems. When this happens, you can dispute the item on your credit card and hold off paying for it until the matter is resolved. Should the seller not resolve it, you don’t pay for it. This doesn’t work this way with a debit card.
You have fewer protections, with a debit card, especially as the money will have already been withdrawn from your account when you buy the item.
Some credit card companies also offer free extended warranties on purchases, car rental insurance, and more.
When using a debit card, you don’t have those protections. When you buy with a debit card, the money is taken from your account immediately.
Some Merchants Won’t Accept Debit Cards
When using a debit card at hotels, gas stations, and car rentals, the merchant puts a hold on your account for a specified amount. They do this to be sure there will be enough funds to cover the purchase. Sometimes, merchants will place the hold for more than double the amount of your purchase.
Hotels and motels have a similar procedure known as blocking. If you reserve your room for, say 5 days, and the room daily rate is $100, they will place a block on your debit card for $500 plus a little more for any incidentals you may buy. Not much incentive to use a debit card is there?
When doing any type of traveling, it’s a bad idea to rely solely on a debit card. A lot of hotels and motels won’t accept them. Most car rental firms won’t allow you to make a reservation with a debit card. However, when you pay for it, a debit card is fine.
You Don’t Have Enough Credit to Apply for A Credit Card
If you’re a new user of a credit card, you’ll have to show proof of enough credit to be approved for a card. Part of this is the credit score. Your credit score will determine how much you’ll be charged for using your credit card.
If you don’t have a high enough credit score yet, you’ll only be able to get a low-interest credit card at a higher interest rate. At the moment, credit cards offer different credit limits depending on your credit score.
You’ll have to show proof of your income and ability to pay back your debts. If you don’t have a high enough credit score, you might not be approved for a credit card. It’s easiest to get a credit card if you have a good credit score.
There Are Too Many Fees on The Debit Cards
Sometimes, you have to use a debit card because it’s the only way to get access to your money. However, many banks charge fees on their debit cards that can add up. For instance, some banks charge a fee for making a purchase only.
Others have a daily or monthly fee that applies if you have a balance on your account. It’s important to read the small print when using a debit card to find the best deal for yourself. If you can, try to use your debit card to pay off a credit card and transfer the balance onto your new credit card. That way, you’ll avoid any additional fees.
You Only Use Cash When Traveling
If you use your debit card to travel, you’re most likely going to have a lot of issues. First of all, you’ll have to get a certain amount of money out of your checking account to make a purchase with your debit card.
That means you might have to withdraw or transfer money from a different account. The trouble is that you can only withdraw or transfer money a certain number of times in a day. So, if you have a checking account with a higher daily limit, you might have to wait until the end of the day to make a large purchase with your debit card.
Another problem is that many stores don’t accept debit cards for travel. So even if you can purchase travel expenses with your debit card, you’ll have to get cash when you arrive at your destination.
You Find It Hard to Track Spending
If you find it hard to track spending, then you should start using your credit cards more often. That way, you can get a breakdown of your spending and start cutting it down. Credit cards also let you see your spending in real time.
That way, you can see if you’re spending more than you should and take steps to get back on track. Credit cards let you see where your money is going in real time. That way, you can determine if you’re spending too much money on certain items and take steps to change your spending habits.
Conclusion
If you want to make better financial decisions, then you should start using your credit cards more instead of a debit card. That way, you can see how much money you’re spending and start cutting it down if you need to. Credit cards also let you see your spending in real time.
That way, you can see if you’re spending too much money on certain items and take steps to change your spending habits. These are three good reasons why you should start using your credit card more often. We aren’t saying to begin charging all you can to a credit card and then end up with a lot of debt. Be sure you can pay the entire balance each month except for those long term purchases.
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