Debit cards and Credit cards are part of the technological advancement toward financial transactions. They can be used for various purchases without you getting in contact with your money. However, Credit and Debit cards are different in some aspects despite their similarities in using them for financial purposes.
Most people get into the dilemma of not knowing which to get due to their similar functions. Well, this article will shed light on the advantages and disadvantages of both Credit and Debit cards which can help you make your decision on which to get.
Credit cards
Credit Cards are cards issued by a bank but are linked to a lending account, a lending account in the sense that your purchases are paid for by your borrowed money. This money would be paid back to the bank with an interest.
Pros Of Using Credit Cards
1) Limited fraud;
Whenever your card gets lost or stolen, you can be assured that your money is safe and nothing would jeopardize it.
2)Flexibility
Credit cards can be used almost everywhere due to the fact that it is widely accepted. It can be used for different online transactions including hotel reservations and flight booking
3)Various rewards.
Credit cards expose their users to different rewards like an extended warranty on products, this even happens when the warranty on the product has lapsed, you can check up with your credit card issuer to know if there’s a warranty from them. There are also some benefits like automated insurance for flights and rented cars
Cons Of Using Credit Cards
1)You will be charged a very high rate if you use it for withdrawal purposes.
2)Failure to pay interest for several months leads to it adding up and can result in debt.
3)You will be endangered to pay several fees like cash advance fees, fees when you transfer debt from one credit card to another, fees when you fail to pay your bills within a month, and fees for just using a credit card that is called “annual fees”.
Debit cards
Debit cards are cards that are linked to your personal account in a bank. It is issued by a bank in the form of Visa, MasterCard, etc with a security pin you only can use.
Pros Of Using Debit Cards
1)Physical transactions;
Debit cards can be used for both online and physical transactions, when dealing with people in need of cash who won’t accept a transfer, it is ideal to use it for a smooth transaction.
2)Keeps check on spending;
Keeping tabs on how you spend your money is important if you’re not comfortable with expending money easily. Debit cards can help in this aspect as it is only linked to the money in your account, so you’re limited to just spending what you have which is not the case for credit cards.
3)Debit cards can be used to withdraw cash easily without high charges. It can be used in case of an emergency where cash is immediately needed.
Cons Of Using Debit Cards
1)Not widely accepted;
Some organizations don’t accept debit cards for transactions and purchases so it is limited in this aspect.
2)Credit is prohibited;
Due to the fact that your debit card is linked to your account, you can’t get anything on credit when you don’t have enough in your bank account.
3) Lose protection;
In case of loss or theft, your card will only be protected by a pin that can be hacked easily. This will give fraudsters access to your money and you might lose all.
Conclusion.
Debit and credit cards both have their pros and cons. The use of any of these cards depends on you as a user to determine if the pros and cons are okay for you. However, you should be careful to weigh both options to know the ideal card suitable for you as this will save you from numerous charges and unnecessary debts.
