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.
#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.
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#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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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.
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#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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#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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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.
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#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.
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#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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