vs Debit Card
These non-cash options are your everyday saviors.
They not only help you settle your bills and pay for your groceries without worrying about cash, they are also
there for emergency situations. Credit cards and debit cards practically run your life on a daily basis. How
exactly do they help you? How do they differ from each other? Here are the FAQs on credit vs debit card.
Credit vs Debit Card: What they are
Though these two can be used interchangeably, they are very different plastic cards. A debit card is a convenient
alternative to cash without the interest. It is linked to your bank account so every amount you charge on it is
automatically deducted from your account. Unlike the credit card, a debit card lets you see how your balance goes
down with each transaction, helping you to keep track of your spending habits and avoid overspending.
A credit card, on the other hand, allows you to spend more than what you have and postpone paying. It lets you use
the card issuer’s money to make purchases and lets you pay it back later. If you do this within the grace period,
you can avoid paying the interest. However, if you don’t, you might end up paying for twice the amount your
Credit vs Debit Card: What they can do
Since a credit card lends you money, you can spend more than you can afford and pay on an installment basis. It
also provides rewards programs that can range from gift cards to cash banks to merchandise, and even travel
packages. However, credit cards can lead you to large amount of debts when not used responsibly. If you want your
financial life on track, you are better off with debit cards and your own money.
Credit vs Debit Card: How they started
Credit cards started as store cards in the 1950s. Diner’s Club is actually the first credit card in history. Debit
cards, on the other hand, were introduced in the late 70s by Seattle's First National Bank as guarantee cards for
business executives. As of June 2009, there are around 1,113,100,000 Visa, MasterCard, American Express, and
Discover credit and debit cards in circulation in the United States alone.
Credit vs Debit Card: Which is better?
The answer to this question is relative to your lifestyle as a consumer and your spending and payment habits. If
you want to keep your finance records straight and avoid fraud and identity theft, the debit card is for you.
However, if you’re into establishing and improving you credit history for mortgage and car loans, you are better
off with a credit card. Not only does it give more flexible financial schemes, it also offers better consumer
Source: Credit Cards For People With Bad Credit Rating
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