Many people want to gain better control of their finances by using a debit, but don’t want to have negative effects on their credit scores and finances by doing away with the credit card. Both have perks, which is why you should not do away with one or the other completely. Last week we discussed the importance of a credit card. This week we will be discussing the perks of a debit.
- Living within your means. With a debit card you can only spend the money you have in your account. Unless you have overdraft protection on your account, if the money is not in your account, you will get denied. You also don’t have to worry about paying interest!
- Most people tend to spend less. Debit cards can make you feel more frugal, and most people try to spend less.
- No late fees. Since you are only spending the money you have right now, there are no bills! And no late fees!
Having a debit card has many perks. But this does not mean to throw away the credit card. There are the right times for using both. For larger purchases you may need your credit card. Also, places like hotels may hold a certain amount of money as a deposit, in case something were to happen. You do not receive the money back until checkout, for example. If you were using a debit you would not be able to spend this money until it was credited back to your account.
As you can see from these past two weeks, there are times to use a credit card and times to use a debit. You must know when the best times to use each are! Having a credit card is important for building credit. Just don’t abuse the credit card! And as always, be frugal with your purchases whether using a debit or a credit.