Credit And Debit Cards: Credit Or Debit, Sir?

Credit or Debit, Sir?

The usage of credit and debit cards have dramatically increased in the recent years. There was a projected total of 160 million credit card holders in 2012 and 654 million debit cards in 2015 (WalletHub/Nasdaq). Both credit and debit cards are methods of payment that do not require you to have cash on hand. Even though both a credit and debit card accomplish the same thing, there are many differences between the two methods of payment that could sway a customer’s choice towards one over the other.

Credit and debit cards are two different methods to accomplish the same goal. However, these cards have different features and functions associated with each one. One of the main selling points of a credit card is that when

A credit card is a great way to build credit history. Credit history is a record of how somebody has repaid loans and bills, it is usually used as a guide for whether a company will lend you money(Consumer). You can also get multiple credit rewards such as cash back, gift cards, frequent flyer miles (BOA). Now, if you think about a very frequently occurring situation we can see the obvious benefit of using a credit card. Imagine you are two days away from your next paycheck from work and your money supply is running a bit short. If you were to have a debit card, you would not be able to buy food for the next two days because you do not have money in your bank account at that very moment. However, with a credit card, you can buy food without the money being directly in your bank account. You can then pay the amount you spent for food, two days later once you receive your paycheck. With this ability to charge money to your account, you are also somewhat safe from theft. Since transactions are not instant, you can report fraud to your bank without actually losing any money (BOA). While we can see that credit cards have many great benefits, debit cards can also spark people’s

These two ways to pay have some subtle, and not so subtle, differences that could change a customer’s mind into choosing one method over the other. Credit cards can help you build credit, and make purchases with your future paychecks and have a good firewall against theft. However, the payments can also rack up into a larger bill due to interest rates, extra charges based on payment issues and you are susceptible to going drastically over budget. Debit cards do not build credit, masking any shady purchases from your banks, they allow you to easily monitor your budget and cuts down on any costly interest rates. Nonetheless, they are not as immune to fraud as credit cards, they do not build credit, which could be a negative as well as a positive, and can be declined if you lost track of available money. In my opinion, albeit a novice one, I believe that the benefits and versatility of credit cards outweigh those of its competitors and that its negatives are not as apparent as the latter. Before getting your next card, do your research and decide which system is best for