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Credit Cards and Debit Cards – Which Among Them Should You Use?

By Janelle Elizabeth

Republish: EasyPublish™
Published: 28Aug2010
Word count: 601
Viewed: 206 time(s)

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The world keeps changing. You will find it quite frequent to come across information or news regarding the country’s economy being unstable or other financial problems. Market crashes in stocks, property market, companies cutting costs to minimize loss or filing for closure. You may notice that people are noticing this trend and changed how they use their money. Some people go gamble and get into debt, others just choose to spend their money on more important and necessities.

On the other hand, throughout these times, financial news has been about an increase in the number of people who has outstanding debt to several banks. One wonders whether the population simply became too happy-go-lucky with their spending habits. It has also become very convenient for anyone to purchase anything due to credit and debit cards. Each card can have different benefits. You will find it quite common that there are some who are unclear whether which one they should sign up.

If you get familiar with the most important distinction between these two then it will become easier to choose which type of financial tool to sign up with depending on your budget and lifestyle.

The advantages and disadvantages of credit cards.
It has become evident that you will see a range of credit card companies or banks promote their gifts and benefits when you sign up or continue spending using their credit cards. A trend you will see is that they let you earn points and usually there is a table of the amount of points needed for you to redeem an item or gift. The gifts are usually in the form of cash rebates, toys, appliances, electronics, airline tickets or even some of your cash back.

You will find quite a lot of people who keep using their credit card for their everyday purchases because it is convenient for them to pay without having to worry about the cash they have at the moment. Having a credit card allows you to delay your payment and you can choose whether you want to pay the full amount or pay a minimum amount. However on your next billing statement, the remaining balance will be charged an interest. Some use this system for loans.

There are some people who would say that using a credit card requires discipline. An advise would be to consider it as a debit card which means to only spend the amount of money you have in your savings account. Another option would be to take a portion of the money you owe right away and keep it until you receive your billing statement. It can be a win-win situation for you where you spend without falling into debt and at the same time, getting the perks you through your card’s reward system.

Debit cards – fast and instant.
So what makes a debit card different? They may look the same because they have the same print and made from the same material however each works quite differently. A debit card is linked to your bank account and the moment you make a purchase, the money Is quickly deducted from your savings account. There are no billing statements to worry about like credit cards do. But you will find that debit cards do not have the same privileges as credit cards do.

It all just takes a little bit of effort in taking note of due dates so that you can enjoy the extra things you can get aside from your purchases.

If you do not want that hassle, then you ought to stick with a debit card.

Everybody wants financial freedom. However before checking into different investing options, you must know how to manage your own finances first. This starts with knowing the basic financial tools we use everyday like a credit and debit card. Are you aware of their main differences and how it works for you?

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