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The expansion of debit cards has resulted in some consumers being unclear about whether debit or credit cards are better.

For the most part, the increase in debit card use is a strong development. Every purchase made with a debit card represents a balance that is not being financed on a credit card. Each year, tons of holiday purchases remain on a credit card statement long after the holidays have ended, resulting in finance charges right through the new year, and probably longer.

With the burden of debt American consumers take on rising as well as unemployment, using debit cards limits the purchases to those items consumers can pay for immediately.

Stop your bad debt ways with a debit card
For individuals with large amounts of debt, a debit card is a smart choice. Using a debit card does require some restraint -- some required and some not. Firstly, the money has to be present in the account in order for a purchase to be made.

Secondly, similar with ATM withdrawals, the consumer has to be predominantly meticulous about noting all purchases in their check registers. Not doing so will most likely result in a bounced check and set off those nasty nonsufficient funds (NSF) fee. Star Loan Services' checking account pricing analysis measured the average NSF fee at more than $25. Even one NSF fee will negate the finance charges avoided by using debit instead of credit.

In addition to staying away from finance charges and fees associated with credit cards, consumers are expected to rein in spending by eliminating the dangerous 'buy now, pay later' mindset. Additionally, the greater part of institutions do not charge any fees for debit card transactions, making this a without-cost way to carry out some financial obedience. These features make using debit instead of credit a smart, and money-saving, substitute. Get more info about smart debit card use.

Expediency users, continue charging
For those that do not have debt, debit cards lack appeal. For those that pay their credit card balances in full every month can enjoy the convenience of up to 40 days of free float. This term used to describe the time stage from when a purchase is made and when the money is in fact withdrawn from the account.

In addition, many credit card holders like to use of a particular card to accumulate rewards in the form of cash rebates or frequent flier miles. For these consumers, the 'buy now, pay later' takes on a whole new meaning and has some substantial benefits. However, these rewards can be reduced, or overshadowed completely if there is an annual fee associated with the card.

Someone who charges $7,500/year to their card, earning one mile for every dollar they spent, will take four years to reach the 30,000 mile plateau and putting them in free ticket territory. However, suppose the card carries an annual fee of $75, the 'free' ticket will actually cost $300. And this is assuming that the cardholder never a paid a penny of interest. Read more about the benefits of credit cards.

All cards do not have the same protection
Eventhough consumers enjoy protection from liability as a result of fraud on both debit and credit credit card purchases, the actuality can be far more strenuous.

Cardholders are not required to pay any amount that may be in dispute when credit cards are used for making purchases. The victim will retain full use of the funds until the matter is resolved. If a debit card is used fraudulently, the cardholder will have to deal with not having that money until the issue is settled.



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