Surprisingly, many people do not know the differences between a debit card and a credit card. I used to work in retail and I would see this all the time.
I even had many people every single day who would try to pay with their ATM card (back when I worked in retail, there were cards that were strictly for the ATM – they were not considered a debit card and could not be used to buy things) and didn’t understand the difference between that either. As a small side note, ATM only cards usually only allow you to take cash out of an ATM, you can not usually shop at a store with it. It’s just not possible (oh the many times I was yelled at because people didn’t know the difference!).
There are many differences and we will be talking about those today. I usually use my credit card, but I know that everyone is different.
Positive of both a debit card and a credit card.
I am horrible with cash and keeping track of what I have spent. This is why I like spending with a card because there are detailed transactions that let me know where I spent my money, what day I spent the money, and how much I spent.
Credit cards can help you build your credit.
If you are looking to build your credit, then a credit card can help you do that. It is best to keep in mind that you need to know how to actually use a credit card correctly for you to actually be able to increase your credit score.
Read How To Increase Your Credit Score And Get What You Want.
Debit cards force you to not go over budget.
One really bad thing about credit cards is that many people over spend and go crazy when they have a credit card readily available to them. A debit card on the other hand forces you to stick to your budget because you are limited to spending the amount that you have in your bank account.
Credit cards usually provide more protection.
My debt card provides protection if my card is stolen, but it is limited to that. Many debit cards don’t have good protection at all. However, with my credit card, I have very good protection. They have noticed immediately when my credit card has been stolen or there have been fraudulent transactions.
Credit cards can also sometimes protect you from bad products, provide travel insurance, and more.
Credit cards may offer rewards points.
One big positive of credit cards that I absolutely love is that there might be a rewards point system associated with your credit card. I have received many things for free because of my credit card rewards points system, and I don’t know if I could ever go back to using a card that didn’t have a rewards system in place.
Do you usually use a debit card or your credit card?
Image via Flickr by usdagov
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