Debit Card Vs Credit Card: Which One Is Better & Which One Should You Get?

1,532 Views Updated: 25 Jul 2017
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Debit Card Vs Credit Card: Which One Is Better & Which One Should You Get?

If you are over 18 years of age and work for a living, then you must have at least one debit and one credit card. Even if you are not, then too you probably carry around plastic money in your wallet. Debit cards and credit cards have certainly made our lives easy, freeing us from the idea of carrying cash with us at all times.

The problem arises when you have to choose between the two; Debit card or credit card and choose which one is the better option? To clear the air, we have decided to shed some light on each, so you can make an informed decision for yourself. This will help you in figuring out which one to count upon for your next swipe.

Benefits of Using a Debit Card

#1. No Debt

The biggest advantage of using a debit card is that it does not put you in debt. In case, you swipe your credit card to make a payment, it adds on to the heap of credit point which is later paid wholly. While in the case of using the debit card, the money which you have in your account is used to make payments for purchases. 

(Image Courtesy: Barefoot Investor)

#2. Pay What you Agreed

When you use a debit card, you only pay the amount you agreed to pay for a purchase. However, when you use a credit card to make a payment, you could end up paying an amount higher than the cost of the commodity you purchased, owing to the interest rates, levied upon on the debt incurred through credit card.

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#3. Rewards

Rewards being offered only with credit cards is a common misconception. Making payments through debit cards can bring you hefty discounts since creditors often charge merchants a processing fee, which they want to avoid.

(Image Courtesy: Your Money)

#4. Instant Transaction

When using a debit card, you can be certain that the transaction will be carried out instantly, which may not be the case with a credit card. If you use the latter to pay a utility bill on the due date, the bill might end up being overdue for which you will have to pay an additional charge.

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#5. Pay Less

There are several additional charges like annual charges, over-limit fee, late-payment fee and much more that credit card users have to pay. However, there are quite less or absolutely no additional charges that debit card users incur.

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 Benefits of Using a Credit Card

#1. Extra Rewards

Though debit card users can also enjoy a number of benefits these days, they do not compare to what credit cards bring to the table. From cash discounts and travel points to straight money back, the benefits of credit cards are galore.

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#2. Warranties

Many credit card companies offer additional warranties and insurance for products purchased through their card. If you purchased a product using a credit card, and it has broken down after the manufacturer’s warranty has expired, getting in contact with the credit card company could prove to be worth it.

(Image Courtesy: Kiplinger)

#3. Theft Protection

Credit cards come with much greater protection than debit ones. If you even happen to lose your credit card, just make sure you report it stolen on time and it will keep you from incurring losses. However, a debit card holder faces a considerable liability if he fails to report the theft or stolen debit card within 48 hours.

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#4. Credit Card don’t “Hold”

When you make a payment at hotels, gas stations or car rental agencies through debit card, the merchant places a hold on a specific amount of money in your account before you actually make the purchase. For instance, USD 200 car rental could keep a hold on USD 500.

(Image Courtesy: utahbound)

#5. Improves Credit Rating

Not to forget, credit cards also help you improve your credit ratings, which you can later use to borrow loans. While making credit card payments on time has a positive effect on your credit rating, debit cards have nothing to do with your score.

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Hope this information will help you pick the one that caters to your needs the best. Use the comment section below to tell us other perks of using a debit or credit card.

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Posted by: Debbie Posts: (4) Opinions: (20) Points: 640 Rank: 167
Opinions (2)
Debit Card

I chose debit card because let's face it: most people in US and many other Western countries do not have the control necessary to use them wisely. I've relocated permanently to Thailand, and I have to say that Thai people are far more responsible with credit card usage. Here we have competent credit card companies like Umay+, and fortunately, their interest rates are reasonable and people use their credit properly. No problem.

Credit cards can be a wonderful financial tool if you know how to budget and keep a set of good practices: never accumulate a balance and always pay it in time and in full. That is how you stop it from creating you problems.

Finally, before getting a CC, create a budget and read all the terms and conditions. That is the foundation!

Debit Card

Although there are several benefits of using a Credit Card, I have heard so many bad experiences that I only use my Debit card for making payments for online purchasing. The worst part is the unimaginable charges and penalties that are charged by Credit Card companies for late payment of the bill. It is not like I do not have any credit card, but I keep it only for emergencies. 

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