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Checking Accounts
-Protecting Your Account
-Fees
& Costs
-ATMs
-Debit
Cards
--Using
Your Card Wisely
--Debit
vs. Credit Cards
--Purchase
Returns
w/Debit Cards
--Card
Blocks
--Questions
& Answers
-Credit Help
-Taxes
-Managing Money
Mortgages
Auto Loans
Personal Loans
Credit Reports
Debt Consolidation
Credit Cards
-Home
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DEBIT CARDS VS. CREDIT CARDS
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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