Credit Card Vs Debit Card – Which is Best For You?

You are thinking of getting a Credit Card or would a Debit Card be more suitable for your needs?

Let’s go through the pros and cons of each so you will be able to make an informed choice.

First, We Will Discuss Credit Cards.

The Advantages of Having a Credit Card

· You don’t need to have any money initially
· The Credit Card company will give you a set amount of money eg £1 000 – this will be your Credit Limit. You can spend up to that amount.
· Each month you will receive a statement from the Credit Card Company – you will be able to choose to pay the whole outstanding balance (what you have spent since your last payment) or if you are short of money you will be able to pay the minimum amount.
· If you pay the full outstanding balance you will not have to pay interest
· By using your card at certain times – you may be able to enjoy up to 55 days interest free expenditure
· The Credit Card companies are battling for your custom. Therefore, they will use many different ways of tempting you to obtain one of their Credit Cards. One of their ruses is to allow you to transfer any other Credit Card balances you may have.
· Transferring your balances from other Credit Cards into your new Credit Card will usually mean you will only need to make one payment each month; this will probably be a lesser amount than if you were to pay each card individually. The term for this is ‘consolidating your debts.’
· The outcome of transferring your balances and thus forking out less money each month means you will have more money at your disposal.
· You can use your Credit Card in most parts of the world.
· You can withdraw cash from Automatic Teller Machines (ATMs) in most parts of the world and you will receive cash in the currency of that country
· You can buy Goods or Services online from most parts of the world
· You can pay your bills or buy Goods or Services telephonically.
· Or a visit to the shops and you can pay at the till with your Credit Card
· You can buy goods from eBay and pay for them through Paypal
· Paypal accept a wide range of Credit and Debit Cards

Even with all the above advantages – there are some disadvantages to having a Credit Card.

These Disadvantages Are:

· Unless you are very strict with yourself – you may overspend and go over your Credit Limit. The Credit Card company will add an additional Penalty Charge on top of their normal monthly Interest Charge.
· You won’t be able to receive Cash Back at the Supermarket
· If you only pay the minimum amount each month – over time you will pay very high Interest rates. This means that even though you are paying each month, the Credit Card company will add Interest so your outstanding balance won’t reduce

Let’s Now Discuss Debit Cards

Having a Debit Card Has Some Advantages

· You can’t spend more than you have in your Bank Account; this is because you are financing your own Debit Card.
· You can’t get into trouble or overspend, because your Debit Card is attached to your Current Bank Account.
· You can only spend as much as you have in your Current Account.
· You can use your Debit Card to pay for your Goods or Services ie physically at the shops, telephonically or online in most parts of the world.
· There are no Interest or Penalty Charges
· At the Supermarket you can use your Debit Card to pay for your Purchases
· Also, at the Supermarket you may be able to receive Cash Back. This means you will save yourself a journey to an ATM to draw cash. In addition – the Supermarkets do not make a charge for giving you Cash Back
· You can use your Debit Card in most parts of the briansclub register world.
· ATM’s in most parts of the world will dispense cash to you in the currency of that particular country
· You can buy goods or services online from most parts of the world, by shopping online or telephonically
· eBay accepts payment through Paypal
· Paypal accepts practically all Credit and Debit Cards including Visa Electron
· Clickbank also accept Visa Electron Debit Cards

The Disadvantages of Having a Debit Card

· You don’t have the Credit Limit of a Credit Card, therefore if you haven’t got the money in your Current Account – you can’t afford whatever it is you want to buy
· Some Debit Cards are Electron. Unfortunately, Electron cards are not accepted by all Providers of Goods and Services.
· WorldPay don’t accept Visa Electron Cards

Having a Credit or Debit Card (known as plastic money) in your wallet is safer than carrying cash around with you.

Therefore, whether you choose to apply for a Credit or Debit card – use the above advantages or disadvantages for each then make your choice with your eyes wide open.

Bear in mind that the Credit Card companies don’t care if you can afford to make the monthly payments or you can’t. In addition, they don’t care if you have a handful of cards to juggle. So, it’s too easy to get yourself into some serious trouble.

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