Debit vs. Credit: Tips For Finding The Right Plastic For You

Most Americans have at least one credit card and one debit card with them at any given time. With the protection and convenience, they offer, who needs cash, right? In this issue, we’ll give you tips on which form of plastic you should use when it comes time to swipe the plastic.

Differences Between Debit and Credit Cards

With their 16-digit card numbers, PIN codes and expiration dates, debit and credit cards look nearly exactly the same, but they’re not. Credit cards, in essence, give you the power to buy through a line of credit to be paid back with interest. While some cards come with a fixed limit, secured credit cards are available with an initial cash deposit that’s held by the company as collateral. There are also cards with no spending limit; the only hiccup with them is that most do not allow users to carry unpaid balances from month to month. Debit cards are connected directly to the user’s banking account, so there are no fees unless one for overdraft is triggered.

Advantages to Using Debit

Debit cards are a great option if you’re trying to control your spending because you’re using money that you already have in the bank. With credit cards comes an abundance of temptation to overspend and rack up the credit. Unlike debit cards, credit cards have an abundance of associated fees. Annual fees, over limit fees and late payment fees seemingly barely scratch the surface.

Advantages to Using Credit

Most credit card issuers provide a host of reward incentives and other perks for using their services. If you’re able to pay off your credit cards in full and on time each month, you can rack up the rewards points in no time by paying your monthly bills (utilities, water, etc.) through them. Car rental purchases are best made with credit since most issuers provide a waiver for accidents. Credit cards also give you more power to dispute transactions and provide you with more legal protection if your card is lost or stolen.

The Bottom Line

If you’re able to control your spending, a credit card is the best way to go in most cases. In addition to all the perks offered by your card issuer, you’ll be able to continually build good credit – not so with a debit card.

For Expert Advice About Getting Out of Debt, Call The Oswalt Law Group

Dealing with seemingly unmanageable debt can be a nightmare. But you do have a host of options available to you. The best way to find the right path for you is to speak with a skilled legal professional who knows all the right financial moves. Call us here at The Oswalt Law Group; there’s never a charge for the first appointment. Our number is (602) 225-2222.