Debit Card vs Credit Card

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Debit Card vs Credit Card

debit cardDebit Card Love

When it comes to payments, it seems that the debit card has been the more popular choice among today’s consumers.

According to a survey, debit use in the United States has reached over 15 billion in point-of-sale transactions in 2002.

This amounts to a whopping $700 billion worth of purchases for that particular year and 35% of electronic payment transactions.

During the recent years, these figures have exploded and the number of consumers opting for the debit card has also gradually increased.

Experts have only just begun exploring the recent trends associated with the apparent popularity of debits over credit cards.

Many believe that this may be because consumers these days are more afraid and wary of incurring debts that they wouldn’t be able to pay.

With a credit card, one is essentially spending money that he doesn’t have and he runs the risk of buying more than his income can afford to pay.

A debit card taps into the individual’s actual financial resources – it takes money from your own bank account. In this setup, you are limited to your bank balance as far as purchases are concerned.

The horror stories of how credit cards have led to massive financial troubles for many individuals are just way too many. Debit cards could potentially protect you from running up huge debts and leading you to the brink of bankruptcy and financial ruin.

But not quite.

It is still possible to incur debts through debit cards. There are a lot of banks that are still more apt to process debit charges even when the user’s bank account has insufficient funds for the purchase.

Before you know it, you’ve already accumulated overdraft charges all the while thinking that you’re still tapping into existent bank funds.

This usually happens because debit transactions are not necessarily processed real time and this holds true especially for purchases where you only sign your name instead of entering your PIN or personal identification number in the terminal.

In essence, carrying a debit card is practically like having a whole book of endorsed blank checks. This makes charge backs impossible unlike with the credit card.

In case of purchase disputes such as when you’re dissatisfied with the quality of service or product that you paid for, it is going to be a long and grueling process of getting a possible refund because you don’t have the bank’s support in your favor.

While debit cards encourage fiscal restraints so that you don’t end up spending more than you can afford, they still come with a lot of limitations that can be difficult to override.

For instance, most locally provided debit cards cannot be used for purchases made while you’re traveling abroad unless they

have the Visa or Master Card imprint on them as these two normally have terminals all around the world.

On the whole, a debit card is not necessarily any better than the credit card. Both have their advantages and shortcomings so it wouldn’t hurt to have both in your wallet.

Debit cards encourage responsible management of transactions so that you don’t incur mountains of debt.

On the other hand, most experts believe that credit cards are offering more in terms of financial deals especially if they are used properly. It all boils down to the consumer’s attitude and how he uses his cards, whether it be a credit or debit card.

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