With all of the different options available in today’s day and age, it is strange that anyone would choose a credit card over a debit card. Well, everyone should at least consider the many benefits of a debit card over a credit card.
Credit cards get people into trouble. That’s the plain and simple of it. People are all too apt to overspend on them and use them in other inappropriate ways. Basically, it can be very hard not to use a credit card when it is on hand.
Today, nearly every transaction that used to require a credit card can be made with a debit card. This includes online transactions and most of those made in stores.
The biggest problem with credit cards – aside from the possibility of overspending on them – is the high interest rates that are attached to them. Even if you pay off a credit card purchase in a timely manner, you will still be paying more than the original cost of the item. If you are late on the purchase, you are in for a load of trouble as interest rates quickly increase when a payment is late. In fact, this accounts for a huge amount of the people struggling with credit card debt in the first place.
But let’s get back to that original credit card problem: overspending. Because you’re actually borrowing money when you are using a credit card, many people later find out that they don’t have enough to cover whatever it is that they purchased. This in itself can push people into credit card debt.
Something that increases the confusion in this particular area is the credit limit on a credit card. Many people falsely assume that until they reach this point, they are in the clear. That is not what a credit limit is. You should always make sure that you have enough money to cover purchases if you are using a credit card.
Furthermore, many people use credit cards for the wrong types of purchases. They are really only designed to be used for large purchases, that you know you will be able to pay off soon. This includes things like rental cars, hotel rooms, or airplane tickets.
Many people just cannot keep themselves from using their credit cards at the wrong times. They use their credit cards for clothes, meals, and so on. This quickly racks up debt which is then quickly added to when interest rates are added into the picture.
With a debit card many of these problems are canceled out altogether.
A debit card is actually connected to your bank’s checking account. This means that you actually have to first have the money to make a purchase. You have to deposit the money into your account to be able to use it. There is no charging or borrowing involved. As you can imagine, this drastically reduces overspending.
A debit card can keep you out of financial trouble. It can keep you from falling into debt. I’d strongly urge anyone to consider ditching their credit cards for a debit card, especially those who have had trouble overspending on credit cards in the past.